A real estate contract is a binding legal document that protects your interests and outlines your obligations—but most people never understand what lawyers actually review in these agreements. A thorough contract review by a qualified attorney can catch costly mistakes, unfair terms, and hidden liabilities before you sign. Here's exactly what gets checked and why it matters.
Title and Ownership Verification
The attorney confirms the seller actually owns the property and has the legal right to sell it. This involves reviewing the title report, deed history, and any liens or claims against the property. If there are outstanding mortgages, tax liens, or judgments, they must be satisfied at closing—or you could inherit these problems.
Your lawyer will also check for title insurance, which protects you against future ownership disputes. They'll review the title commitment to ensure all exceptions and requirements are clearly understood before you proceed.
Purchase Price and Payment Terms
This section details the agreed-upon price, deposit amount, and payment schedule. Your attorney verifies:
- Down payment amounts and deadlines
- Whether the price is fixed or subject to appraisal contingencies
- Earnest money deposit protections
- Financing contingencies and loan requirements
- Timeline for final payment at closing
A common issue: some contracts allow sellers to keep your earnest money deposit if you can't secure financing, even if the home doesn't appraise at the agreed price. A skilled attorney catches these traps and negotiates better terms.
Contingencies and Conditions
Contingencies protect you by allowing cancellation under specific circumstances. The attorney ensures critical contingencies are in place:
Standard contingencies include:
- Financing approval and appraisal
- Home inspection within a set timeframe (typically 7–14 days)
- Title review completion
- Property survey (if applicable)
- Pest or termite inspection
- Septic system or well inspection (for rural properties)
Missing contingencies can leave you obligated to buy a property with major defects or funding problems. Your attorney confirms each contingency has a clear deadline and cancellation rights.
Inspection and Appraisal Clauses
The contract should specify who pays for inspections, when inspections occur, and what happens if major issues are discovered. Your attorney checks whether you have the right to request repairs, demand a price reduction, or walk away based on inspection findings.
Appraisal contingencies are equally critical. If the home appraises below the purchase price, you typically have 3–5 days to renegotiate, request the seller lower the price, or withdraw. Without this protection, you'd owe the difference out of pocket.
Closing Costs and Responsibility
Real estate closing costs typically run 2–5% of the purchase price and cover attorney fees, title insurance, inspections, and lender fees. The contract should clearly state which party pays which costs. Your attorney ensures:
- Seller-paid closing costs are explicitly stated
- Lender requirements don't contradict the contract terms
- HOA transfer fees and document preparation costs are accounted for
- Prorations for property taxes and utilities are calculated fairly
A $500,000 home with $12,000 in closing costs can become a $15,000 surprise if terms aren't locked down.
HOA and Covenant Restrictions
For properties in homeowners associations, the attorney reviews HOA documents, bylaws, and financial statements. Key concerns include:
- Monthly or annual HOA fees (and whether they're increasing)
- Special assessments or pending capital improvements
- Restrictions on renovations, pets, or rental use
- HOA dispute history and reserve fund status
A property with a healthy HOA and reasonable fees is very different from one facing a $50,000 special assessment or chronic disputes.
Disclosures and Seller Obligations
State law typically requires sellers to disclose known defects, environmental hazards, flood zones, and previous damage. Your attorney confirms all required disclosures are included and accurate. Missing disclosures can allow you to sue for damages after closing.
Default and Remedies
If either party breaches the contract, the agreement should specify remedies—whether you can sue for specific performance (forcing the sale), recover earnest money, or claim damages. Your attorney ensures these terms protect your position fairly.
Frequently Asked Questions
Q: How much does a real estate attorney typically charge to review a contract? A: Flat fees range from $500–$1,500 depending on complexity and your location, though some attorneys charge hourly rates ($200–$400/hour). Mercoly helps you compare trusted real estate attorneys in your area to find the right fit for your budget.
Q: How long does a contract review take? A: A thorough review usually takes 24–72 hours, though urgent reviews can happen overnight for an additional fee.
Q: Can I use the same attorney as the seller or real estate agent? A: No—this creates a conflict of interest. Always hire your own independent attorney to protect your interests.
Find and compare qualified real estate attorneys on Mercoly to ensure your contract protects you fully.