If you’re buying or selling a home, you might wonder whether you need to hire a realtor or a real estate attorney and what the differences between the two are.
Real estate agents and real estate attorneys can sometimes offer similar services, but their training, education, and scope of experience are typically quite different. Let’s explore the similarities and differences between the two, when you might need to hire a real estate lawyer vs. a realtor, and their respective costs and fees.
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Real estate attorney vs. realtor: Key differences
| Realtor | Real estate lawyer | |
|---|---|---|
| Cost | Around 3% of home sale price | $750–1,250 for average closing |
| Billing structure | Sales commission or flat fee | Hourly rate or flat fee |
| Provides legal advice | No | Yes |
| Writes buyer offers | Yes (in most states) | Yes (in some states) |
| Drafts and revises contracts | No (except for offers) | Yes |
| Resolves legal disputes | No | Yes |
| Assists in negotiations | Yes | No |
| Protects client’s legal interests | No | Yes |
| Facilitates transactions | Yes | No |
| Reviews title | No | Yes |
| Required by law | No | In certain states |
| Representation | Both parties (in some states) | Only one party |
So, which should you choose?
Realtors are not legally required, but it's common to hire one for most home sales and purchases. A realtor will help you with pricing, negotiations, and managing the transaction. Paid real estate agents typically earn a commission based on the final sale price of a property, which is often negotiated by the seller.
Real estate lawyers are required for property transactions and contract drafting in some states. You could also hire one to protect your best interests in complex situations (such as a foreclosure or inheritance sale).
What is a realtor?
A realtor is a real estate professional who guides buyers and sellers throughout the transaction process. Technically, to be called a Realtor®, an agent must be a certified member of the National Association of Realtors® (NAR), but many people use the terms “realtor” and “real estate agent” interchangeably. Real estate professionals, including realtors, play a crucial role in the home buying and selling process by providing essential guidance and expertise.
Real estate agents have experience with the intricacies of the market and can assist sellers and buyers with many tasks. For example, they can:
- Plan and organize an open house
- Advise on pricing strategy
- Help find or list a home
- Access the local multiple listing services (MLSs)
- Negotiate post-inspection and post-appraisal changes
- Explain seller disclosures
While using a realtor is not legally required, many people prefer to work with a realtor to save time, receive professional assistance, and tap their expertise in the local market.
Real estate agents need to have a high school diploma, finish real estate education courses, and acquire a state license. To become a Realtor, agents must join NAR.
What is a real estate lawyer?
A real estate lawyer or attorney is a legal professional specializing in property-related legal issues, such as buying and selling homes, reviewing real estate contracts, or assisting with closings. Hiring a qualified real estate lawyer is essential to navigate the complexities of real estate transactions.
Attorneys represent your interests and help you navigate the legal intricacies of the process, especially if the transaction is not straightforward. Real estate lawyers play a crucial role in reviewing real estate contracts to ensure legal protection.
Every party has the right to be represented by a lawyer, and some transactions might involve attorneys for both the buyer and seller, plus attorneys for the mortgage lender and even the title company.
The states where an attorney’s presence is legally required to buy or sell a house are called “attorney states.” Depending on the location, the lawyer might be involved in several steps of the process, such as:
- Drafting a purchase agreement
- Reviewing the title
- Overseeing the closing
- Facilitating conflict resolution if there are disputes between a buyer and a seller
The states where the closing can happen without involving an attorney are called “title states” or “escrow states” because a title company can close the transaction without legal oversight.
Even if not required by the state, many buyers and sellers can benefit from a real estate lawyer.
For example, real estate lawyers can assist with foreclosures, short sales, post-purchase title claims, and ownership disputes. For sellers listing on the MLS without a realtor, a real estate attorney can help ensure they are legally protected. Some other circumstances might include selling or buying a rental currently occupied by tenants, divorce and inheritance sales, or buying a house for sale by owner (FSBO).
✍️ Note: A realtor can represent both a buyer and a seller in some states. However, each party has to have their own real estate attorney. Otherwise, it could be considered a conflict of interest.
A real estate lawyer must earn at least a bachelor’s degree in legal studies, and many have a more advanced degree. They are also required to pass the state bar exam and be licensed to practice law in the state where the transaction will take place.
If you want to find a real estate lawyer, your state bar association website could be a good place to start. You can also ask your realtor or any friends or relatives who have recently purchased a home to see if they have recommendations. When choosing a real estate lawyer, ask questions about the types of real estate transactions they have experienced with and how they charge their clients.
Does my state require a real estate lawyer to buy a house?
Some states only allow real estate lawyers to provide specific services, such as drafting a purchase agreement. Performing a title search is crucial to confirm the seller's ownership and ensure the home has a clear title, thus preventing potential legal complications during the transaction. Other states authorize real estate agents to take on those tasks.
A lawyer is required for closing or document review in the following states:
| Alabama Connecticut Delaware Georgia Indiana Kansas Kentucky | Maine Maryland Massachusetts Mississippi New Hampshire New Jersey New York | North Dakota Pennsylvania Rhode Island South Carolina Vermont Virginia Washington West Virginia |
Remember that real estate laws can change quickly, so check with your realtor for current requirements.
Roles and responsibilities
Real estate agent role
A real estate agent plays a crucial role in the home buying and selling process. Their primary responsibility is to represent their clients’ interests and facilitate a smooth transaction.
Real estate agents are knowledgeable about the local market, current trends, and regulations. They can help buyers find their dream home and assist sellers in staging and pricing their property.
Real estate agents are also skilled negotiators, ensuring their clients get the best possible deal. However, it’s essential to note that real estate agents are not licensed to provide legal advice.
Real estate attorney expertise
Real estate attorneys, on the other hand, are experts in real estate law. They can provide legal advice and guidance throughout the home buying and selling process.
Real estate attorneys can review contracts, conduct title searches, and handle closing procedures. They can also help resolve disputes and negotiate contracts. In some states, only real estate attorneys are allowed to prepare home purchase documents, perform title searches, and close deals.
Real estate attorneys can provide valuable expertise in complex transactions, ensuring their clients’ rights are protected.
How much does a realtor vs a real estate attorney cost?
How much a realtor costs
Most realtors work on a commission, which traditionally amounts to 6% of the home sale and is split between the seller’s agent and the buyer’s agent. For example, for a house sold for $500,000, the realtor’s fee is typically $30,000. You might also encounter an agent offering a flat fee — a set amount that does not fluctuate based on the selling price.
Who pays real estate agents commission?
Historically, a seller would cover the cost of both the listing agent and the buyer’s agent. As of August 2024, buyers are responsible for setting the buyer agent's fee.[1] However, a seller still has the option to cover the buyer’s agent fees as part of contract negotiations.
If you’re looking to save on realtor commission without sacrificing quality, you can work with a low-commission company like Clever Real Estate, which pre-negotiates deals with the top professionals from your state. This means you can find a full-service agent charging 1.5% listing agent commission — half the typical rate.
Curious how much you could end up saving? Check out our handy real estate commission calculator.
How much a real estate attorney costs
Typically, real estate attorney fees for a closing cost $750–1,500.[2] However, this figure can change depending on your location, the type of services needed, and the complexity of the situation. Real estate attorneys play a crucial role in residential real estate transactions, including ensuring a clear title and drafting essential legal documents such as purchase agreements.
Real estate attorneys usually charge an hourly rate or a flat fee that will cover particular services. It may be difficult to assess how many hours of work you might need from a lawyer, so it’s wise to ask for a total estimate before hiring them. While the flat fee may seem more straightforward, remember that you might have to pay more if unforeseen issues arise.
Who pays for a real estate attorney?
If you want to hire a real estate lawyer to represent you (whether or not your state requires it), you should expect to cover their cost. If your mortgage lender requires an attorney to be present, that fee will be added to the closing costs, which could be covered by either the buyer or the seller, depending on your purchase agreement.
When to hire a real estate professional: Complex transactions
When dealing with complex transactions, it’s highly recommended to hire a real estate attorney. Complex transactions may involve multiple parties, unique contract clauses, or disputed titles.
Real estate attorneys can navigate these complexities and ensure a smooth transaction. They can also provide guidance on local and state laws, helping clients avoid costly mistakes. In addition, real estate attorneys can represent clients in court if disputes arise.
While real estate agents can handle simple transactions, complex transactions require the expertise of a qualified real estate attorney.
The bottom line
A realtor is a professional who helps buyers and sellers along their journey with a variety of tasks, from staging an open house to providing market insights. Unlike a realtor, a real estate attorney is a legal expert who specializes in real estate transactions and documents.
- You may want to hire a realtor when you need an expert with market expertise, negotiation skills, and knowledge of the ins and outs of the process to assist you during buying or selling a home.
- Your state laws might require an attorney, either in lieu of or in addition to a realtor, for a transaction.
- Even if it’s not required by law, you can seek the help of a realtor, real estate lawyer, or both — depending on your needs.
Looking for a realtor to help you navigate the market? We can match you to the top realtors in your area to guide you through your home sale or purchase.