Should I Hire a Real Estate Agent or Lawyer to Buy a House?

Learn when you need help from real estate professionals, and how to find the best one.

It’s no secret that real estate agents earn high commissions. Although the commission is usually paid by the seller, the cost may be indirectly passed on to you. And real estate lawyers charge exorbitant hourly rates. This raises the question -- do you need a real estate agent or attorney to help you buy a home?

What the Law Says

Every state has its own set of real estate laws. For the most part, a real estate agent's help is not legally required, though agents can help you with tasks that border on legal ones, such as preparing a home purchase contract. In some states, however, only a lawyer is allowed to prepare the home purchase documents, perform a title search, and close the deal.

Reasons to Hire an Agent

The process of buying a house is complex, and most people find it's easiest to get through with an agent by their side. Paperwork will be flying around like a small tornado, and it can be helpful to have someone familiar with the process to deal with it. Other parts of the transaction will be happening quickly too -- hiring inspectors, negotiating over who pays for needed repairs, and more -- all of which is second nature to an experienced agent. What’s more, experienced real estate agents usually have contacts with good inspectors, mortgage loan brokers, and others who can make your buying process easier.

Don't Use the Seller's Agent

One of the best reasons to hire a real estate agent is that the sellers are likely to use their own agent -- and you want to keep that agent from taking over the process. In fact, the seller’s agent may pressure you to let him or her represent both of you, in a “dual agency” relationship that primarily benefits the seller. (The less scrupulous sellers’ agents don’t make it clear that they’re working for both people, but if only one agent is involved in your transaction, it’s fair to assume that the agent’s loyalties are with the seller.) It’s better to have your own agent than settle for dual agency.

Keep Control Over the Process

You’re the only one who really knows what you want in a house. Even if your agent is scouting out homes for you, there’s a lot to be said for scanning the listings and attending open houses yourself. You may find out that your agent doesn’t understand your needs as well as you thought, or won't take you to see "FSBO" (for sale by owner) listings. (

Educate Yourself

Even if you do use an agent (or a lawyer), it’s wise to learn as much as you can about the home-buying process. For example, educating yourself about the market value of comparable homes in the area will protect you against over-aggressive agents who might urge you to bid high for a particular house. And you’ll prevent misunderstandings and reduce the stress of being told to “sign here” if you study the contents of the various real estate documents in advance.

Reasons to Hire an Attorney

Except in states where it’s mandated, an ordinary real estate transaction doesn’t require an attorney’s help. By now, real estate transactions are so standardized that most people in your state will use the exact same purchase contract, just filling in a few blanks.

However, if legal issues arise that your real estate agent can’t answer, you’ll need an attorney’s help. Although good agents know a lot about the negotiating and contracting part of the process, they can’t make judgments on legal questions. For example, what if your prospective new home has an illegal in-law unit, including an existing tenant whom you want to evict in order to rent the place to a friend? Only a lawyer can tell you with any certainty whether your plans are feasible. Or, if you’re drafting any unusual language for the purchase contract, or are concerned about some language in your mortgage, you may want to have an attorney look the documents over.

How Real Estate Agents Are Paid

Real estate agents normally work on commission, not salary. They receive their slice only after your home search is over, the contract negotiated, and the transaction complete. The seller typically pays the commission to both the seller’s agent and your agent -- usually around 5% of the sales price, to be split between the two agents. This percentage isn’t cast in stone, however. For example, the seller might negotiate the percentage down if the house is particularly expensive. (And in probate sales, the court sets the commission.)

Variations on the typical commission arrangement also exist. For example, some buyers prefer to hire an agent and pay the commission themselves, figuring it will make the agent more loyal to the buyer’s interests, and provide grounds for a drop in the sales price. Less commonly, you may find an agent willing to perform limited tasks for an hourly fee rather than a full commission (in which case you’d also want to ask the seller to bring down the sales price accordingly). Discount and rebate brokers are also available, usually providing you limited services, or interactions via the Internet, at a commission as small as 1%.

Agents paid on commission have a built-in conflict of interest

Even an agent who represents only you, and not the seller, has a financial interest in seeing the deal go through. While experienced, reputable agents won’t let this interfere with their advice to you, it may cause less scrupulous agents to insist that you’ll never get the house unless you bid high, to recommend home inspectors who make light of potential problems, or to otherwise compromise your interests.

How Attorneys Are Paid

Attorneys normally charge by the hour, at rates ranging from $150 to $350. You may also find attorneys who charge flat fees for specific services, such as preparing real estate closing documents. Although attorneys prefer to handle your entire case with a "blank check" from you regarding hours to be spent and tasks to be accomplished, you’re hiring the attorney, and you can call the shots. If you prefer to hire an attorney for only a limited number of hours, or for specific tasks, such as answering a legal question or reviewing a document, you can negotiate this (and you should record your agreement in writing).

For more information on working with agents and attorneys to bring about a smooth, affordable house purchase, see Nolo's Essential Guide to Buying Your First Home, by Ilona Bray, Marcia Stewart and Alayna Schroeder.