Honolulu Home Buying Guide – Should You Consult an Attorney Before You Sign?

The safe answer is, “Yes,” always. However, in most of the country and especially on the West Coast, buyers almost never consult attorneys before signing a purchase agreement. Indeed, while on the East Coast real estate attorneys are readily available, on the West Coast it’s hard to find one. In practice, the vast majority of pur­chases conducted by agents and signed without benefit of an attorney go perfectly well. However, if something f should go wrong, then you could rue the day you didn’t first seek competent counsel.

A purchase agreement is intended to be a legally binding contract. When I first became involved in real estate over 30 years ago, it was a single-page document with a few paragraphs of standardized text and the majority of items written in by hand.

Today it’s typically 5 to 10 pages long, consisting almost entirely of paragraphs crafted by attorneys. About the only thing left to fill in is the address, the price, the deposit, and the loan amount.

The reason for the metamorphosis in sales agreements is that over the years litigation between buyers, sellers, and agents has demonstrated that the old contracts were loose and easily broken. Today’s contracts are designed to be tighter and more difficult for either buyer or seller to break. The way this is accomplished by agents (who for the most part are not attorneys) is to try to foresee all the potential problems and then have a lawyer construct the appropriate language in a prewritten contract. In essence, almost everything in a modern contract is boilerplate, standardized legally vetted paragraphs.

However, purchase agreements cannot foresee all pos­sible problems. Often contingencies must be written in, and sometimes the situation of the buyer, seller, or the property is unusual. Only you, or your attorney, can pro­tect your interests here.

Be wary, however, of attorneys who seem to go out of their way to earn their fee by adding complicated clauses that give you excessive protection. In their zeal to protect you, the attorney may create an offer that is so one-sided, the sellers won’t accept. It’s an old joke in real estate that when you bring in the attorneys, you throw out the deal!

Many buyers (probably a significant majority) who have purchased Hawaii real estate in the past did not use attor­neys and quite successfully completed transactions. On the other hand, if this is your first time out, or there is anything unusual about the transaction or anything you are concerned about, you probably will want to get a lawyer to look things over for you, just to be sure. (Attorney’s fees here are usually quite low – $500 to $1000 to handle the entire transaction!)

Also the vast majority of Honolulu real estate agents are not attorneys. Indeed, when asked to give legal advice, they will almost universally respond that they are not qualified and will not do so. Nevertheless, I have known many agents whose practical knowledge of real estate law far exceeds that of many attorneys I have known!

Leave a Reply