Why do you need a lawyer in NYC transaction

You just need one. A good one.
Tony InJe Yeo's avatar
Aug 23, 2024
Why do you need a lawyer in NYC transaction

In every real estate transaction in NYC, having a lawyer is not just recommended—it's essential. Lawyers here do much more than simply provide legal counsel; they play a critical role in ensuring the success of your transaction. I often receive questions from overseas and out-of-state clients who aren’t familiar with the necessity of a lawyer in NYC real estate deals. Many of them have previously handled real estate transactions elsewhere and are hesitant to spend money—another ticketed item on their closing costs—on what they perceive as an unnecessary service.

However, in New York, having a lawyer is indispensable!

A lawyer's role in a real estate transaction includes conducting due diligence on the building, reviewing and negotiating the contract, and, most importantly, communicating with all parties involved. This involves exchanging legal documents, scheduling the closing, and coordinating with building management, clients, and agents. Experienced real estate attorneys understand that fast and efficient communication is key to a successful transaction. In some cases, deals can fall through if the attorneys are unresponsive. I've personally encountered situations where I had to contact the other party's attorney because the agent went silent after an accepted offer, only to find out that the seller had accepted another offer. While attorneys may not always appreciate agents calling them directly, a good agent knows when to step in and keep the transaction on track.

That’s why it’s crucial to work with an attorney who has stellar experience and an extensive network in the field. The investment is worth it, as they help carry the deal forward, ensuring that all parties are aligned—especially when you're making one of the most significant investments of your life.

Due diligence is another critical aspect of a lawyer’s role, ensuring that the building you’re buying into is sound. In co-op transactions, for example, lawyers review board meeting minutes to identify any issues with elevators, heating systems, or other concerns, and they scrutinize the building’s financials. I highly recommend working with a lawyer who provides detailed, written due diligence reports as part of their practice.

The legal aspects of a transaction are something most agents can’t fully address, and during the process, questions do arise—such as those related to Power of Attorney, tax implications, and title matters. Good lawyers are equipped with the knowledge to answer these questions in a timely manner.

While many lawyers from various specialties can close a real estate transaction, I strongly advise using a lawyer who specializes exclusively in real estate. For residential transactions, use a residential real estate lawyer; for commercial transactions, use a commercial real estate lawyer. Just as NYC real estate is incredibly diverse and complex, so too is the law governing these transactions. It's essential to have a legal expert who knows the intricacies of the specific type of property you’re dealing with.

Most lawyers will require you to execute a retainer agreement with a deposit prior to starting their work. The remaining balance is typically paid at the closing.

If you’re buying, you should engage a lawyer as you get closer to having an accepted offer. If you’re selling, engage a lawyer after you sign an exclusive agreement with an agent to sell your property. I’m happy to introduce you to a great lawyer whom I’ve worked with almost exclusively for years in my practice!

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