Florida real estate misunderstandings
There is a lot of confusion regarding attorneys and the perception of their role when a buyer is purchasing or a seller is selling a house or other property in Miami or anywhere else in Florida.
Below is a summary of several common misunderstandings related to the purchase and sale of properties in Miami and Florida which is intended to provide buyers and sellers with a better understanding as to the role of real estate attorneys and the benefits they can provide to buyers and sellers.
1. Attorneys kill deals
The most common misunderstanding in Florida real estate transactions is that attorneys cause deals to fall apart. This is entirely untrue. In fact, attorneys are trained to facilitate real estate transactions and get them to close as efficiently as possible. The most common reasons real estate transactions do not close are material defects in the title of the property which cannot be cured and the failure of the buyer and the seller to agree on certain material terms of the deal. Florida real estate attorneys have the unique ability and training to spot both apparent and hidden issues with the property which if not properly addressed prior to closing can be large, expensive, and time consuming problems for both the buyer and the seller after the closing.
2. A Florida real estate attorney is more expensive than a title company
The second most common misunderstanding is that attorneys are expensive and cost more than a title company. This is untrue as well. In Florida both attorneys and non-attorney title companies can act as the title and closing agent in a real estate transaction. The promulgated rate for the title insurance premium is the same everywhere in Florida. The closing fees charged by Florida attorneys for conducting the closing are usually the same as those charged by a title company. In fact, in many cases the total charges of Florida attorneys acting as title and closing agents are less than those charged by a title company with the additional benefit of the protection only an attorney can provide.
3. An attorney charges an attorney’s fee in addition to the title charges
When most Florida attorneys handle the title insurance side of a routine real estate transaction, in many cases they do not charge an additional attorney fee. However, some transactions are not routine and require additional services that only an attorney can perform such as clearing material title issues. In cases such as these, a reasonable attorney’s fee is charged for these additional services, and when the attorney is also acting as the title and closing agent these attorney’s fees are typically less than those that would be charged by an attorney not handling the closing.
4. In Florida an attorney is not needed for a real estate closing because the title company handles everything
A title company is prohibited by law from giving legal advice, so if a counter party is trying to get out of a contract, or a buyer does not know how to take title to the property, or a title issue exists, the title company cannot help with this. An attorney will be needed for these and many other matters which can arise, and that will cost extra if a non-attorney title company is involved. For these reasons, many other States require the buyer and seller to be represented by an attorney in a real estate transaction. It only make sense to have a Florida real estate lawyer handle the whole transaction from the beginning which will likely save money in the long run and will provide the additional protection a title company cannot, by law, provide.
5. Every Florida title company is operated or owned by an attorney
There is no requirement that a Florida title company must be operated or owned by an attorney. In fact, many Florida title companies are owned and operated only by a Florida licensed title insurance agent, and that person does not need to be an attorney. Florida licensed title insurance agents only need to attend a 40 hour classroom course in title insurance to satisfy the education requirement to become a title agent. Florida attorneys, on the other hand, need to not only have a college degree, but must also spend an additional 3 years in rigorous study in law school, pass a 2-day bar exam, and continuously expand their knowledge and skills through continuing legal education. Additionally, Florida real estate attorneys have certain fiduciary duties and obligation to place the interests of their clients first which Florida title companies do not have.
6. A buyer or property owner in Florida cannot choose who will be handling their closing
This is absolutely untrue as well. Federal law provides that a person buying a property or refinancing a property has an absolute right to select their own title and settlement agent. This is intended to ensure that the buyer’s and the owner’s interest is protected instead of being compromised by the influence of other interested parties in a transaction. The only way to ensure that a buyer’s and an owner’s interest is fully protected is for them to choose who will be handling their closing.