What Does a Real Estate Financing Attorney Do?
And does a Maryland property owner need one?By Super Lawyers staff | Reviewed by Canaan Suitt, J.D. | Last updated on May 4, 2023 Featuring practical insights from contributing attorney Sarah D. Cline
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Selling commercial or residential property can be a more complicated task than you think.
While some property owners may be inclined to try and handle a complex sale themselves, more often than not it makes sense to hire an experienced Maryland real estate financing attorney to guide them through a transaction.
“Real estate financing” is something of a catch-all term that covers a wide variety of legal and financial issues related to real estate transactions. It can deal with everything from obtaining a mortgage to advising the seller on the potential tax implications of a real estate transaction.
Lawyers who specialize in this field must not only have a deep background in Maryland real estate law; they also need to understand how financial markets work.
“As a real estate transactional attorney, I’m wearing a lot of hats and am kind of a jack-of-all trades when it comes to getting a deal done and helping my client navigate that process, depending on what role they are in,” says Sarah D. Cline, a real estate attorney at Miles & Stockbridge in Frederick who represents buyers, sellers, and lenders.
Topic of Real Estate Law
Some of the more common topics involved in Maryland real estate finance law include:
- Negotiating sales contracts for homebuyers and sellers.
- Reviewing property titles and surveys to ensure a property will meet the buyer’s needs.
- Reviewing loan documents and helping negotiate where possible.
- Obtaining financing for sales.
- Helping individuals navigate non-traditional residential financing, such as loans from family or friends.
- Handling property transactions where special legal restrictions may apply, such as those involving condominiums and cooperative buildings.
- Addressing the potential impact of government intervention in the mortgage market.
- Structuring commercial-backed mortgage securities (CMBS).
- Negotiating sale and leaseback contracts, where the seller sells a property to a buyer then agrees to lease it back.
- Refinancing a property owner’s existing mortgage loan.
- Filing for bankruptcy on behalf of a property owner.
- Providing other “creative financing” alternatives for real estate transactions, such as short sales or co-lending agreements.
A Real Estate Lawyer Can Buy You Peace of Mind
Not every real estate transaction requires an attorney. In Maryland, there’s no requirement to use attorneys for residential real estate transactions, and these buyers and sellers often rely on residential real estate agents and the title company to close a deal.
But hiring an attorney can provide invaluable assistance for a comparable price. “From my perspective, if you can get a lawyer for the same price as a lay title agency, it makes sense to me that you would get an attorney,” Cline says. “Because we compete with the lay title agency, we try to keep our fees competitive in the market.”
A lawyer can help you save time by figuring out many of the legalities involved in financing a transaction for you. An experienced attorney has seen situations like yours before and already knows what steps to take. More to the point, a real estate finance attorney knows what questions to ask the buyer or lenders involved in a potential deal, so they can hopefully identify potential problems before they happen.
“I also tell clients it’s a lot easier for me to look at the contract and make sure it protects you before you sign it than try to get you out of it after the fact,” Cline says.
And as is always the case when you hire an attorney, that person is legally and ethically obligated to work only for you. “I’d like to think there’s an additional level of peace of mind,” Cline says. “I just have another license on the line. I have ethical obligations as a lawyer on top of my malpractice and ethical obligations as a title producer.”
Other parties to a real estate deal have their own interests to protect. So even when they are acting in good faith, there is always a risk that they will take certain actions that might undermine your own position. Having your own attorney can provide insurance against such risks.
Finally, even after a deal is complete there can still be financing-related issues that crop up weeks or months later.
A Maryland real estate financing attorney can keep an eye on things for you and alert you to any post-transaction issues that may arise. In the end, hiring a qualified lawyer is effectively buying peace of mind that a real estate transaction will not overwhelm you with legal complexity or unknown pitfalls.
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