Illinois: An Attorney State

The online real estate investment publication REtipster has compiled an interactive map showing the level of attorney involvement required in a real estate transaction in each state. The vast majority of states call for at least some involvement by lawyers. Thirteen —all in the eastern U.S., including New York, Georgia and the Carolinas — require that an attorney participate throughout the process. On the flipside, 10 states in the west — among them California, Texas, Nevada and Oregon — allow title companies and escrow agents to close deals. In Illinois, title companies and lending institutions can close out a transaction. However, the state strictly prohibits real estate agents from acting in any sort of legal capacity. That includes giving anything that could be construed as legal advice. Even agents who also hold law degrees cannot simultaneously act in both capacities for the same client. As a result, a lawyer must be brought into the equation when it comes time to draw up and review sales contracts.

Many agents also consult attorneys regarding required documents – such as disclosures and new construction contracts – if they are relevant to the sale. Deeds, contract riders, legal communications and amendments to contracts must be written by a licensed legal professional, and though state law does give agents the right to fill in the blanks on standardized contract documents, they cannot make amendments or add any language, conditions or riders.

Regina Cartright, an agent with Jameson Sotheby’s International Realty, uses Barb Goodman of Barb Goodman Law for her business needs, and has even started working with her for personal matters.

“I like using Barb because I know that when I give her the transaction, it will go through and she will do her best to hold everything together,” Cartright says. “She advocates for the client, and she’s great at defending your cause.”

Cartright thinks that agents looking for an attorney should find someone they can relate to and who they feel comfortable asking a silly question. “They need someone who will be accessible and sympathetic to their client,” she says.

That may not seem like an item that would rank highly on a list of criteria in the search for a qualified real estate attorney, but real estate transactions are deeply personal matters.

Attorneys read through the contract and relevant documentation and then provide feedback and clarification, and are present for the closing. In Goodman’s opinion, a good real estate attorney negotiates attorney review and inspection issues, keeps track of mortgage contingency deadlines, attends the closing and reviews the documents. In Illinois, attorneys also formally memorialize all of the agreements between parties after the contract has been signed.

Illinois law prohibits attorneys from earning wages by commission, leaving them as independent arbiters who can objectively review contracts on behalf of clients without being swayed by pressure to close more transactions.

“In many of states where they only have a title company for closings, the client is not protected, because they do not have an attorney overseeing the process,” Cartright says. “No one is really reviewing things, meaning it puts much more responsibility on the agent to make sure all the i’s are dotted and the t’s crossed.”