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Ensuring Smooth Real Estate Transactions with Standardized Legal Workflows

Rebecca Spiegel

Written by

Rebecca Spiegel


February 24, 2023

Ensuring Smooth Real Estate Transactions with Standardized Legal Workflows

There are a lot of moving parts with real estate transactions. Your team needs to stay on top of inspections, negotiate terms, research liens, follow up on financing, and help your client successfully close.

Challenges to creating templated processes for real estate law firms

Real estate law firms know that each transaction requires different processes and paperwork, from residential sale and purchase agreements to commercial leases. This complexity of having many types of transactions add an extra layer of difficulty for attorneys trying to create streamlined processes across their workloads. With careful planning and consideration for the wide range of tasks associated with each matter, it’s possible to develop efficient workflows that ensure all parties receive timely attention and quality service.

Benefits of having standardized real estate transactions at your law firm

Standardizing the real estate transaction process can provide many benefits for law firms. Once you have a templated workflow, you can introduce automation through task management software, document assembly tools, and e-signature services. Automation also helps reduce the duplication of tasks and provides a better way for teams to collaborate on projects. In addition to automating processes, you can look for solutions with form libraries that can assist you in automating document generation. Look for form libraries tailored to your municipality and offer forms beyond generic contracts.

By using automated workflows, records are accurately tracked throughout the process, eliminating confusion between parties involved in the transaction. Automated workflows provide an easy way to track deadlines and notifications related to each process step while ensuring each task is completed accurately and on time. These operational shortcuts help reduce costs by eliminating manual processes and reducing errors that can add time to your transactions. Creating repeatable and scalable processes gives your team the bandwidth to scale and take on more business.

How to get started setting up workflows for your law firm

To start designing workflows, you need to break down each matter’s parts into smaller pieces. Consider all facets of your workflows – what needs to be done, who needs to do it, and when each item needs to be completed – and identify areas where to replace manual processes with automation. This design process results in workflows suitable to their specific requirements and continued optimization.

Write down all the parts chronologically and who would be responsible for the tasks, noting any dependencies. A dependency indicates a task cannot be completed without completing something else. For example, you cannot send email reminders for a consultation if you haven’t confirmed the date/time of the consultation.

From here, it’s time to implement and reiterate your workflows. With the right tools and processes in place, creating a streamlined system that works for all involved parties is possible.

Download: Smokeball's Workflow Checklist for Real Estate Transactions in Illinois

Workflows for legal real estate transactions

All right, we now know why creating workflows in your legal practice can save you time, money, and energy, letting you focus on providing the best services to your clients. Let’s dive into specific workflows for your real estate practice.

Each state has its own set of laws to follow when dealing with real estate law, so be sure to adapt the workflows below to your jurisdiction. You can make these workflows as simple or thorough as your team wants.

Pre-contract period

Legal teams need to take several steps during the pre-contract period of a real estate law firm. Add all relevant property details to your practice management software. These details include the address, square footage, property index numbers, and other pertinent information. Also, set critical dates for tasks such as due diligence periods and closing dates.

Standardize your intake process

Every real estate law firm should take these steps during client intake and opening a new case:

  • Pre-screen potential clients and perform a conflict check
  • Respond to the initial inquiry
  • Use a calendar system to schedule a consultation.
    • Automate emails to the client with relevant information and reminders
  • During the consultation, use a standard intake form to capture relevant information, like property details, financing and tenancy information.
  • Draft, review, and send an engagement letter
  • Confirm receipt of the signed engagement letter

Opening a Real Estate Matter

  • Create any physical file or electronic file for discovery items and signed documents
  • Add all parties’ contact information to the matter.
  • Add critical dates for sale to practice management software.
  • Add what type of real estate the seller wants to sell (single-family home, multifamily, near water, Condo/HOA, etc.)
  • Clarify if it’s a primary home or if any of it is rented out
    • Review next steps for the seller (where are they moving, are they renting (review lease), are they buying (add a contingency clause to sale)
  • (If applicable to your jurisdiction) Order Title, HOA docs, records request, find documents (deeds, titles, etc.)
  • (If applicable to your jurisdiction) Review the Title and send it to the buyer’s attorney
  • Check for municipality requirements
  • Assess capital gains
  • If applicable, assess the next steps for tenants. For example, will you deliver the property vacant?
  • Identify the terms you need to add to the contracts (terms, dates, repairs, credits, etc.)

Because different properties require different next steps, you may have more tasks added to this workflow. For example, (in some municipalities) the seller must have a smoke detector certificate and is responsible for a final water reading.

Due Diligence Period

The due diligence period allows the buyer to inspect the property, review title documents, assess zoning laws, and check for potential environmental hazards. It also lets buyers negotiate repairs or other concessions from the seller before closing on a deal. Law firms can help ensure their clients make informed investment decisions by taking these steps during due diligence periods.

Buyer’s Due Diligence Process

  • Confirm the client is qualified for the loan
  • Review convenience, restrictions, and restrictions on the property’s intended use.
  • Order survey the property (investigate zoning, property lines, and assess the flooding zone)
  • Order inspection of physical property (structures and buildings)
  • Identify what terms must be added to the contracts (terms, dates, repairs, credits, etc.)
  • Draft, review, and send a request for repairs or credit addendums
  • Draft buyer’s modification letter or confirm contingency addendums/clauses on the sale of existing property
  • Merge terms from the seller.
  • If applicable, draft, review, and send Buyer’s Right to Terminate.
  • Confirm walkthrough

Seller’s Due Diligence Process

  • Review due diligence requests (buyers modification letter)
  • Assess and negotiate concessions like repairs or leaving credit
  • Confirm walkthrough

Closing Preparation Period & Closing

The closing preparation period and closing for real estate law firms involve several steps to ensure the sale is legally sound and all parties involved are satisfied. Attorneys will review documents, prepare contracts, and coordinate with other parties involved in the sale. The closing consists in signing documents, transferring funds, and recording the deed with local authorities.

Closing for a Buyer’s Matter

  • If applicable, draft, review, and send Buyer’s Right to Terminate.
  • Add the intent to move forward and mortgage commitment dates in your practice management software
  • (If applicable to your jurisdiction) Ten days before closing, get the brokers’ commission statement
  • (If applicable to your jurisdiction) Ten days before closing, prepare, review, and send closing documents (aka. closing packet) to the client
  • Two weeks before closing, check with the client (or lender) on loan status, confirm the client is attending closing or signing a Power of Attorney (POA)
  • Three days Before the closing date, confirm the closing amount needed to bring to closing, including taxes and prorations, and confirm repairs have been made and other items from attorney review met.
  • Two months after, mail deed to the client

Closing for a Seller’s Matter

  • Two weeks before closing, check If you are planning on attending the closing or signing a POA, order payoff
  • (If applicable to your jurisdiction) Ten days before closing, get the brokers’ commission statement
  • (If applicable to your jurisdiction) Ten days before closing, prepare, review, and send closing documents (aka. closing packet) to the client
  • Three days before closing, confirm the closing amount needed to bring to closing, including taxes and prorations, attorney review, walkthrough

Enable a Smooth Closing

A real estate transaction can be complicated, but by taking the time to standardize elements at your law firm, you can make the process much smoother for all involved parties. Having everything from standardized contracts to clear timelines laid out ahead of time, everyone knows what to expect and can plan. This itemization of key steps helps avoid surprises or problems later and ensures everyone is on the same page from start to finish. What steps have you taken to streamline your firm’s real estate transactions?

Want to learn more about how Smokeball can help your real estate law firm?

Get all the templated checklists your team needs for real estate transactions in Illinois.

Download Now

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