Do I REALLY need an attorney?

This is a question I’m asked all the time, especially in California where attorneys are rarely seen in residential home purchases or sales unless something goes wrong…really wrong.

Some states actually require the buyer and seller to hire attorneys before they close on the deal. In others, attorneys are involved in the closing process as settlement or escrow agents. That’s not the case in California.

There is so much to be excited about when you’re buying a home, and you should be excited! You’ve worked so hard to buy your new dream home and you should be able to enjoy the process without having to worry about what lurks in the small print of your contract or how something might affect you five or ten years from now.

But what about my real estate agent?

Your rockstar real estate agent will still play a really important role in your purchase or sale. You need someone equipped with the knowledge, skills and resources to either market your home or to help you find your new dream home. Licensed real estate agents have access to the MLS (multiple listing site) to pull comparables, find properties currently on the market and those coming soon. They’re also great at negotiating the terms of the purchase/sale agreement, home inspection items, and helping everyone make sure deadlines are met.

But they aren’t attorneys.

And it’s unfair to ask a real estate agent to risk their real estate license (and their livelihood) by giving legal advice. Especially when it comes to changing standard form contracts. (WHAT?! You mean you can change those terms? Yes - but it’s best done with an attorney!). The standard forms were drafted by attorneys for the local associations and modifications should be reviewed by an attorney.

While real estate agents know these contracts, it’s best to have an attorney review the contract with you to make sure you’re protected. Everyone has unique needs, and while form contracts help streamline the process, they don’t always address your needs.

I want to sell my house without an agent, do I need an attorney?

You can absolutely sell your house by yourself. There are no requirements that you use a real estate agent (or an attorney) when they want to sell their house, but it’s often a good idea to get the extra support.

When you sell on your own, you can’t rely on the buyer or their agent to advocate for you. You might be approached by an agent who offers to represent both you and the buyer to make things easier, but at the end of the day, that agent can’t truly represent either one of you like they would individually.

You also run the risk of not disclosing the right things or the right way.

Real estate agents are really good at marketing. They can reach a wider pool of possible buyers. They also know your neighborhood and how to price your home. Of course, you’re the one who knows your house best, but they can really take you to the next level in capturing top dollar for your home.

What about Prop 13?

Prop 13 was enacted in 1978 to limit the amount your property taxes can increase in any given year. It’s currently capped at 1% + any special voter-approved taxes and a limit of 2% per year increased in the assessed value (unless there’s a change in ownership).

When you sell your home and buy a new home in California, you lose that tax basis, unless you meet certain requirements. This can be a huge issue for folks who want to move but are concerned about the increased taxes on the new home.

When you buy a home in California, the property will be reassessed by the county to bring the value up to current levels. This typically results in a supplemental (catch-up) bill the county sends to the buyer to pay taxes based on the new value.

Have more questions?

You can submit your questions using our contact form or by scheduling a strategy session.