Title company says I don't need a lawyer for my first rental closing. Do I hire one anyway?

Question

I'm buying a small single-family rental, nothing complicated, seller is a retiring landlord and the contract is the standard state association form with two handwritten addenda about the tenant in place.

My state doesn't require an attorney at closing, and whether an attorney has to be involved is one of those things that varies state by state, so the title company is handling everything. They were friendly about it and said most of their buyers use no lawyer at all.

I called a local attorney and the quote was $850 for a contract and title commitment review plus a call to go through the tenant addenda. That is real money against my closing costs, and my agent thinks it is unnecessary on a purchase this plain.

The case for paying: this is my first one, I have never read an estoppel or a security deposit transfer clause, and the addenda were written by hand.

The case for skipping: the form contract is standard, I have title insurance, and $850 buys most of a new water heater.

I genuinely don't know which way to go, so I'd rather hear how people who have done a few of these would spend it.

mitchell_ray4 · Answer

Handwritten addenda are where I'd spend the money. Everything typed came from a form somebody already fought over.

mikeoconnell7 · Answer

The tenant in place is the part I'd want a set of trained eyes on, wren. Security deposit transfer and proration of rent get handled differently depending on state landlord-tenant statutes, and a hand-drafted addendum is exactly where a deposit ends up unaccounted for. That is one bad number away from costing more than the $850.

luis_carrera · Answer

I've analyzed 60 properties and bought none, so take my vote with that context. What I'd want to know before deciding is whether the $850 includes a call after closing when a question comes up, or ends at the closing table. A one-time review with no follow-up is worth much less to a first-time buyer than the same fee with a relationship attached.

renee_dubois · Answer

My third purchase was the one that taught me. A hand-added clause said the seller kept the last month's rent, and the tenant's copy of the lease said that money was prepaid rent for the month after closing. I ate $1,150 and an angry conversation. An hour of attorney time on the first two deals is the cheapest tuition in this business (my opinion, and I still don't hire one for every closing).

Title company says I don't need a lawyer for my first rental closing. Do I hire one anyway?

4 replies