When buying a luxury home, many people wonder whether it’s better to engage a real estate agent or a real estate lawyer. Each has particular value to add to you as a buyer, but what if you didn’t have to choose between the two?
If you’ll allow us to coin a phrase, what you’d have is a realtorney.
Our principals here at Lawyers Realty International are exactly that, practicing attorneys and licensed Realtors. We not only help you find the perfect investment or vacation property, we help you navigate the oftentimes complex waters of purchasing it.
Why Use a Realtor?
It might be helpful to first clarify what a Realtor is and the services they provide. A Realtor is a real estate agent who is also a member of the National Association of REALTORS® (NAR) and must adhere to the NAR’s Code of Ethics.
A real estate agent–in our case a buyer’s agent, as we only represent buyers–is your advocate during the home-buying process. He or she works with you to determine your needs and wants and to educate you on the market. He’ll also research the market to find available properties that match what you’re looking for.
Once you have the property picked out, the agent guides you through the negotiation process, hiring an inspector, facilitating necessary repairs, and helping you with the paperwork.
But a real estate agent does have some shortcomings. While most deals are straightforward enough that a standard contract will suffice, any legal issues that arise may be out of the agent’s purview. In fact, buyer’s agents are limited by law as to giving legal advice. They’re not, however, prohibited from representing both you and the seller at the same time, which might rightly cause you concern about whether he has your best interests in mind.
How a Real Estate Attorney Adds Value to a Luxury Home Purchase
A qualified real estate attorney will have extensive experience with all kinds of real estate transactions, not solely residential deals. He will be able to craft a specialized contract for any out-of-the-ordinary aspects, such as renting for a year before buying. If their are any liens or evictions pertaining to the property, he can help you with those legal challenges.
Unlike a real estate agent, an attorney has a clear duty to you and can’t represent any other party in the transaction. He’s bound by attorney-client privilege, so you have an added layer of confidentiality protecting your communications. And these communications will be much more streamlined and clear since you have one point of contact, instead of two different people.
Benefits of an Attorney for International Home Buyers
Buying land in a foreign country can present its own unique challenges, making the assistance of an attorney even more valuable than in a domestic purchase.
Consider the example we touched on in a recent blog post: an unscrupulous developer bilked Chinese nationals out of $160 million in a fraudulent convention center development project supposedly coming to Chicago. If these investors had had a dedicated legal representative in the U.S. performing due diligence on this “developer”, they would have been alerted to the fact that he was lying about his background, his political connections, and his municipal permits. Instead, they put their assets at risk from 7,000 miles away.
Even when a deal is above-board, tax rules and immigration laws can be confounding to those not familiar with U.S. tax code or our convoluted immigration system. For example, when you get ready to sell your property, the disposition will be subject to FIRPTA withholding taxes. But if the seller of the property you’re buying is also a foreigner, you are the withholding agent and could be liable for the tax yourself if you fail to withhold.
When you factor in state and local taxes, capital gains taxes, LLCs and tax shelters, E2 visas and immigration paperwork…it should become clear pretty quickly why a qualified legal professional is a must in an international luxury home purchase.
International Luxury Living—Simplified.
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