In Real Estate closings or settlement in many states, a buyer or seller can choose to use an attorney or a title company authorized by the state to conduct real estate closings. If you live in New York or California, you know or your Realtor will quickly inform you that there is only one part allowed to settle real estate transactions. Thus, this post specifically address Virginia real estate transactions.
As a Realtor, I am frequently asked by a buyer or seller whether they should use a title/escrow company or an attorney. This is a question to be resolved early in the purchasing process to ensure the house transfers to the new owner on the day noted in the contract.
Frankly, my first response is always to clarify that not every attorney is a real estate attorney. Attorneys typically concentrate on a limited number of fields of law such as personal injury, wrongful death and such or perhaps real estate, wills and trusts. In large offices, there can be attorneys specializing in wills and trusts and another specializing in real estate. The key, as I tell my clients, the lawyer sought to close a real estate transaction should, as a typical part of his/her day, handle real estate transactions with paralegals supporting that practice.
Upon clarifying the importance an attorney focused on real estate,
we can focus on the key differences and similarities of title/escrow and real estate attorneys:
Title Escrow or Attorney
Can Order Survey
Can Work with Bank for Payoffs
Can Conduct Title Search
Can Order Bank Payoff
Can Prepare HUD(final statement of costs)
Can Provide Lender and Owner's Title
Can keep Buyer, Seller and both Realtors
aware of process proceeding to Settlement
Receive Termite and Moisture Reports
Receive Copies of Repairs Bills and note
on Settlement Statement if needed
Differences in Work
Title Escrow Attorney
Can Conduct Closing by Can conduct closing by
Showing docs for buyer reviewing each document
or seller to sign to ensure his/her client
should sign the document
and that all documents are
consistent with terms of
Can Prepare the Deed
Can Create Power of Attorney
Can review the Survey noting Property line discrepancies
Can interpret contract language in case where seller or buyer
takes an errant position on a term of contract, helping the client complete the transaction with a
Can represent the buyer's
or seller's interest
throughout the closing process.
Though there are a myriad of details that a Title/Escrow or Attorney can do as well. There are also other details that could or could not occur in a real estate transaction that only an Attorney could handle as they require interpretation of the law.
It is a serious offense if a Title/Escrow company or a Realtor such as me start to interpret the law as that is in the scope of a trained lawyer.
Thus, use of a Title/Escrow company is very possible and is a lower cost option than an Attorney. Yet, the buyer or seller must evaluate will the savings be worth the lack of representation.