A real estate lawyer career concerns facilitating the business of real estate: selling, buying, and leasing, land, buildings, housing, natural resources of the land (crops, minerals, water) or any other interests in real estate. Overall, a Real estate lawyer’s work is primarily concerned with transactional work, usually drafting, negotiating and closing transactions.
It is very difficult to accurately inform you what the real estate attorney salary is and be cautious of those websites who do without giving you this warning: The answer depends on many different factors. To give you the general “ball-park” figure; an experienced real estate attorney can obtain a salary of $120,000+ however this will depend on numerous factors such as: 1) Geographic location of employment, (salaries are higher in certain big urban areas compared to rural areas). 2) Does the attorney work for a large firm? Generally, larger firms pay larger salaries (and require longer hours). In considering a real estate lawyer career, don’t concern yourself with salary right now, get a feel for the work that real estate lawyers do and then decide if you want to become one. If you truly have a passion for real estate law you will find a way to make money.
Wondering how to become a real estate attorney? Obviously, before you can settle into a real estate lawyer career you first you have to become a lawyer (we explore this topic in other articles), and generally this requires the following: 1) Graduate from an ABA approved law school; and 2) pass the bar exam in the state you intend to practice in; and 3) pass the character and fitness review of the state bar; and 4) be sworn into the state bar as a licensed attorney.
a real estate lawyer does not require that you “majored” or “Concentrated” on
Real Estate law in law school. Though it
is possible, most law students do not “Concentrate” (or major) in any subject
during their time in law school.
Of course there is no direct route to entering a real estate lawyer career, but the easiest method is to work for a real estate attorney during the summers of your law school career. Then upon graduation from law school apply for a position in the real estate department of a law firm. It is still possible to develop a real estate lawyer career if you are a new graduate and do not have prior summer experience in real estate, but it is slightly more difficult. A common method to becoming a real estate lawyer is to work for a smaller firm that does many different types of legal work and then volunteer for all the real estate assignments.
As a new law school graduate pursuing a real estate lawyer career, let’s say a client comes into your office regarding a real estate sale or purchase of a building. A number of things have already occurred behind the scenes without your involvement; usually, the buyer and the seller either know each other previously from working in the real estate business, or brokers have introduced the two parties. Further, in many cases the brokers have already drafted a “term sheet” reflecting the basic business terms of the deal. If the brokers have not drafted the term sheet you should do so because brokers will often not clearly draft the terms of the deal, and it will be easier for you to draft and negotiate the real estate contract if you have already drafted the term sheet.
The term sheet is the first basic written reflection of the terms of a real estate deal. Usually real estate term sheets are non-binding which means neither party is bound to the deal and has nothing to lose if they back out. Only when the Real estate contract is executed are the parties bound to the deal (with some exceptions). The term sheet is merely a basic foundation of business terms agreed upon by the buyer and seller, and is used by real estate lawyers to begin drafting the real estate contract, which will include all of the legal terms.
The real estate contract (or otherwise referred to as the contract, or agreement) is the formal written agreement that reflects all of the terms of the real estate transaction in great detail. The contract document is the controlling document from the time it is signed by the parties until the time when the deal is completed. Not only does the real estate contract expand and explain all the details of the deal, but it also anticipates consequences for possible problems before closing. For now realize that once the agreement is executed, it does not mean the deal has actually been completed or “closed”… the money and ownership is not exchanged until later, at the closing.
During your real estate lawyer career, drafting and negotiating real estate contracts will be a big part of what you do on a day to day basis.
In terms of a real estate transaction the due diligence period is the time when the buyer has the ability to review the physical details of the property such as; conduct an environmental investigation (to ensure there is no contamination), or review the leases of any tenants at the property, or review the title to make sure the seller actually owns the property and there are no mortgages or other liens on the property. Due diligence investigations are a large part of the work you will complete in a real estate lawyer career.
As counsel for the buyer, in most states you will review the following items during the due diligence period to make sure that the deal is sound.
1) Title – Title, or who owns the real estate being sold is an extremely important part of the due diligence investigation. In many states a real estate lawyer is required to obtain title insurance for their client. Title insurance is where an insurance company specializing in real estate title will insure the buyer against any possible claims of 3rd parties regarding claims to the property, defects in title, lawsuits, etc. What this means is that the title company verifies who owns the property and promises the Buyer (and any lender) that the title company will pay for any costs if the title company is incorrect, as in a situation where a 3rd party has an ownership interest in the subject real estate, and the title company generates a search report or “title report”. Overall, your job as a real estate lawyer is to review this title report and address any concerns that the title company has before they are willing to insure the sale to the Buyer.
2) Mortgage – One of the most important elements that will be reported in a title report concerns open mortgages on the real estate. As a real estate lawyer for the buyer you need to make sure that you are aware of any open mortgages on the property. All mortgages must be paid off at the closing (or the completion date of the transaction where the buyer takes ownership of the real property and the seller takes the money).
3) Tax Liens – Any taxes the seller has not paid related to the real estate must also be paid off. When an owner of real property does not pay their real estate taxes, the local government will usually auction the debt to a private buyer. This is referred to as a “tax lien certificate” and you as a real estate attorney representing the buyer of a piece of real estate have to make sure that this did not happen at any point to the subject real estate and if it did, that the Seller pays it off.
4) Inspection – A physical inspection of the property is also required, and real estate lawyers are not equipped to do this themselves… they have to hire an inspector or another expert who is qualified. It doesn’t matter whether the property is residential or commercial, usually the real estate lawyer for the Buyer will coordinate an inspection of the building and property. The inspector’s job is to go through the building and property and point out anything that needs to be repaired, replaced, or further investigated. The inspector will then generate a report, and the lawyers will then negotiate possible reductions in the purchase price of the property based on the inspection report.
5) Environmental – Another important part of a real estate lawyer’s responsibility is to coordinate an environmental investigation on the property. The buyer of the property does not want to be stuck with a leaking oil tank or groundwater contamination (which in some states may cost a lot of money to clean up). So as a real estate lawyer for the buyer (and depending on the state where you practice), you will contact an environmental inspection company to check for any signs of environmental contamination, and possibly have an inspector sweep the site for any unknown underground storage tanks.
6) Leases – if your client is purchasing a multi-unit apartment house, or a commercial building, one of your tasks as the real estate lawyer for the buyer during the due diligence period is to review any leases that the seller has with any tenants at the subject property. These leases will be provided to you by the seller’s lawyer.
7) Easements – Easements are another item which need to be reviewed by real estate lawyers. The title report will include copies of any easements related to the property. What is an easement? There are two basic types of easements… an affirmative easement is where a property owner grants access rights to his property to another party; and a negative easement on the other hand is a type of easement agreement where one party agrees not to do something that they would usually be legally allowed to do. During the due diligence period a real estate lawyer will read any easements related to the property and make sure that they are simple common easements, and do not grant extraordinary rights which may negatively affect the value of the property.
Document Drafting Period - Once all the investigations have been completed, the due diligence period has expired, and the real estate lawyers on both sides of the transaction have come to an agreement on any purchase price reduction or credit, the lawyers will now draft and negotiate the closing documents, and the Buyer will work on obtaining purchase mortgage financing (if they need it). If you are considering a real estate lawyer career, realize that becoming a real estate lawyer requires being comfortable drafting and negotiating documents.
Financing – Most buyer’s require financial assistance to purchase real property and cannot pay the full amount out of their own money. Mortgage financing makes the possibility of purchasing real estate possible for average citizens. In a case where mortgage financing is required, the buyer will approach a bank or other lending company and apply for a mortgage. A mortgage is where a bank or other lender agrees to front a certain percentage of the purchase price (usually 80% max in residential deals and 70% max in commercial deals, the buyer is responsible for the balance). In exchange for the loan the buyer agrees to pay the lender the money back over a period of years (usually 10, 15, 30), and the real estate is offered as collateral for the loan.
It is important to understand that if you represent the buyer in a real estate deal that although they will actually occur at the same time, you will actually have two separate closings. The first closing is the execution of all of the mortgage loan documents… otherwise known as the “mortgage closing” that qualifies your client to obtain the money from the lender. Once you email signed documents to the lender, they will fund your firm’s bank account via wire transfer. Now that you have the money in your firm’s attorney trust account, you are able to transfer the money to the seller. Here is the second closing which is referred to as the “title closing”. Here is where the seller provides the deed to the buyer, and the buyer gives the money to the seller.
The title closing documents usually consist of a deed which is the document that evidences ownership and confirms a passing of title (and which will be recorded with the local government) and other supporting documents. There are different types of deeds which make certain different levels of representations and warranties, but there is no need to get into those specifics here. Just know that the form of deed and the other ancillary closing documents will be reviewed, negotiated and approved by lawyers for both the buyer and seller. Further, the title company will be offered a chance to comment on these documents, and the executed deed is given to the buyer at the closing.
Closing –The real estate lawyers on a real estate sale will agree on the day and time to complete or “close” the sale. This is the day where each party will appear, iron out any final details or problems, execute all documents, exchange copies of all documents, and exchange the deed and the money. The closing is the final event required to complete a real estate transaction.
In conclusion, a real estate lawyer career is primarily a transactional type of career. Becoming a real estate lawyer means that your work will concern conducting activities such as selling, buying, or renting land, buildings, housing or natural resources.
Business Lawyer Millionaire.
-Everyday at 7:00 pm EST.