Use builder's suggested closing attorney OR get my own? (mineral rights, 2014)
Raleigh, Durham, Chapel Hill, CaryThe Triangle Area
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I wouldn't worry about using the builder's attorney as typically the attorney is there to simply make sure the paperwork is correct, and that you have clear title. Also, most builders require you to use their approved attorney, so I'm surprised you even have a choice. Especially with a builder as big as DR Horton.
Actually, they cannot "require" you to use their attorney. They do, however, usually try to entice you to use their attorney for the convenience. At closing, there is usually a form that is signed by the buyer, saying that you were not "required" to use this attorney or this lender, blah blah blah.
You are correct that the attorney's job is the same if it is the builder's attorney or someone else you have chosen.
LEGALLY, they do work for the buyer, as well as the seller.
Seems to me you can always get an attorney if/when problems start to arise. Until then, why do you need one, and if no problems ever develop, why would you need a second one at the closing?
My personal view: closing attorneys in NC (and other states that use attorneys to close real estate transactions) function much more as closing agents - making sure documents are in order, signed propertly, and dispatched to the appropriate place - than lawyers dispensing legal advice.
Actually, they cannot "require" you to use their attorney. They do, however, usually try to entice you to use their attorney for the convenience. At closing, there is usually a form that is signed by the buyer, saying that you were not "required" to use this attorney or this lender, blah blah blah.
You are correct that the attorney's job is the same if it is the builder's attorney or someone else you have chosen.
LEGALLY, they do work for the buyer, as well as the seller.
Vicki
While technically that is true, isn't it a part of most big builder contracts that closing will happen at "their" attorney's office?
While technically that is true, isn't it a part of most big builder contracts that closing will happen at "their" attorney's office?
Nope. That is illegal. They cannot make that part of the contract. They can say that they'll pay your attorney's fees if you use their attorney but they can't make it mandatory.
Lately, I've had builders say that if you use their attorney, they'll pay the fee plus give you your keys at closing instead of making you wait until it is recorded.
Legally, the attorney checks the title and prepares the paperwork. Legally, if there is anything not by NC standards, the attorney cannot close. They are still bound by NC laws.
Nope. That is illegal. They cannot make that part of the contract. They can say that they'll pay your attorney's fees if you use their attorney but they can't make it mandatory.
Lately, I've had builders say that if you use their attorney, they'll pay the fee plus give you your keys at closing instead of making you wait until it is recorded.
Legally, the attorney checks the title and prepares the paperwork. Legally, if there is anything not by NC standards, the attorney cannot close. They are still bound by NC laws.
Vicki
Vicki,
I know this is a post from 2009, but just wanted to ask you this question, since it makes no sense to creat a new thread. We are buying a new construction in Forsyth county and the builder requires that we use their attorney. This is what it says in the Purchase Agreement:
ATTORNEY: As defined hereunder by County of which the property is located, the following applicable attorneys must be used to close on your home. Seller reserves the right to select other attorney of seller's choice.
Is this ethical? I mean, why would the builders attorney work in our favor? Also we will be paying this attorney as per the GFE provided to us by our lender. The builder is not reimbursing us for this in any way.
You really should start your own, new thread instead of hijacking an old one. It doesn't cost more!
No, really. Start a new thread. Use the same topic if you like. But you keep respondents from the imposition of reading all the previous information, some or most isn't pertinent to your specific situation.
OK, I'll toss in my 2cents worth.
First, keep in mind the difference in "using their attorney", (the one they hire to represent themselves), and "an attorney they recommend", (one who has been hired by and to represent other buyers, whom they have used in the past with success). The wording you provided "the following applicable attorneys" sounds like they are providing you a list of names, probably those they have worked with in the past without hassles. That isn't unethical unless you distrust the professionalism of all the names on that list.
Another thing to remember, that I learned when I bought my house. Until the contract is signed, you'd be surprised at what can be renegotiated or changed. If you have an attorney already, just give them the name and ask them if it would be acceptable to change the contract by appending it to their list.
You really should start your own, new thread instead of hijacking an old one. It doesn't cost more!
No, really. Start a new thread. Use the same topic if you like. But you keep respondents from the imposition of reading all the previous information, some or most isn't pertinent to your specific situation.
OK, I'll toss in my 2cents worth.
First, keep in mind the difference in "using their attorney", (the one they hire to represent themselves), and "an attorney they recommend", (one who has been hired by and to represent other buyers, whom they have used in the past with success). The wording you provided "the following applicable attorneys" sounds like they are providing you a list of names, probably those they have worked with in the past without hassles. That isn't unethical unless you distrust the professionalism of all the names on that list.
Another thing to remember, that I learned when I bought my house. Until the contract is signed, you'd be surprised at what can be renegotiated or changed. If you have an attorney already, just give them the name and ask them if it would be acceptable to change the contract by appending it to their list.
Sorry about that. I was debating between using this thread or start a new one. Infact I was wondering if I will be citied for creating a new thread for the same topic! I will start a new thread and thank you replying inspite of. Just on an end note. We have already signed the Purchase Agreement and the builder REQUIRES that we use one of the attorney they have listed. They are NOT suggesting us, it is their requirement and that is what I do not feel comfortable about, when I am paying for it.
I know this is a post from 2009, but just wanted to ask you this question, since it makes no sense to creat a new thread. We are buying a new construction in Forsyth county and the builder requires that we use their attorney. This is what it says in the Purchase Agreement:
ATTORNEY: As defined hereunder by County of which the property is located, the following applicable attorneys must be used to close on your home. Seller reserves the right to select other attorney of seller's choice.
Is this ethical? I mean, why would the builders attorney work in our favor? Also we will be paying this attorney as per the GFE provided to us by our lender. The builder is not reimbursing us for this in any way.
Thanks!
In NC, we use one attorney to do our closings. The paperwork is already done by the bar association so an individual attorney is not writing up his own paperwork.
The closing attorney is mostly doing the paperwork that the lender dictates to him. He is preparing the HUD-1, which shows all the monies used to settle (do the closing). Attorney is also preparing the paperwork for you to sign, both lender documents and gov't paperwork. So, buyers usually choose the attorney. Mostly we'll use the builder's attorney because as I said,he is just facilitating the paperwork.
In NC, even though the attorney is working for the builder, he owes you, the buyer, honesty, ethics, etc. He could lose his license if he does anything illegal.
Hope that makes some sense...just got back from being out of town and my brain isn't functioning this late!!!
If you felt something wasn't right, you could still hire your own attorney and have him advise you. Of course, I'm not an attorney so this is my opinion and what "I" usually do!
Sorry but I have to chime in. If you choose your own attorney - they represent you - not the builder at all. If you use the builder's attorney, that attorney (under NC State Bar ethical rules) is required to disclose to you the scope of their representation of the builder and obtain yuor consent. Go to ncbar.com and look for 97 Formal Ethics Opinion 8.
As a closing attorney, I am biased but I like to think that I provide good services to my clients and that my entire job is not limited to paperwork. I search title, draft title opinions, explain documents and answer legal questions.
As far as the closing attorney owing you a duty even if he represents the builder - that is true. However, there have been many builders that went out of business in the past few years. Many of them did not pay their subs. Many of them had their own closing attorneys that closed these loans despite the fact that the subs were not paid. Now if I am representing a buyer and see that there are multiple liens filed against a builder, that will raise red flags in my mind and I be speaking with the title insurance company and getting all the subs to sign waivers rather than just take the builder's word that everyone has been paid.
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