This is a practice that is often done, but it may not be the best approach. Buyers will often be offered this service "FREE" as a service of the lender who engages the attorney to do the closing for them. It seems like it's hard to beat the price, but then there's the old adage, "you get what you pay for".
Keep in mind that the attorney primarily works for the lender; not you. Most of the time the goals of the buyer and the goals of the lender are one in the same. So in most instances using the closing attorney as your buyers' attorney can work out just fine. But remember, it's that attorney's responsibility to close the loan for the bank.
Let's say you've just done the final walk-through and you are unhappy with the condition of the home after the owners move out. If you have a reason to believe funds should be escrowed to take care of any issues uncovered like dented walls, badly stained wall-to-wall carpet, a lot of "stuff" left behind that you wanted removed, etc., will that attorney advocate on your behalf or will s/he step back and do little or nothing to help? My experience is that they say it is something the buyers, sellers, and brokers need to work out rather than being pro-active on the buyer's behalf.
If you are going to use the bank's attorney to function as your buyer's attorney, make certain you know up front what s/he is going to do for you. Will they add protective clauses or riders to the P&S for you? Will they explain the contract to you paragraph by paragraph before you sign it? Will they talk to the seller's attorney on your behalf and negotiate any legal issues that may come up? These are some of the many ways it could be better to have your own attorney representing you rather than doubling up by using the bank's attorney.
Again, most of time it won't hurt you to use the bank's attorney. They are going to do the title search for the bank and that will protect both you and the bank. But if there is ever an issue between you and the bank, guess whose side that attorney is on?
If you're going to use an attorney to do the P&S for you, regardless of what bank you end up using to close the transaction, then you can have an on-going relationship with that same attorney. If, for example, you change lenders mid-stream for one of numerous reasons that might make sense to you, will that person continue to be "your attorney"?
So the fact that your attorney would be able to close for multiple lenders and would not fight you to switch lenders, then you can feel more comfortable that this attorney is primarily looking out for your best interest. If that attorney ends up closing for you, they may waive the fee for doing your P&S and any up-front work. They will still be paid to do the closing and they will get an even larger payment for writing the title insurance policy.
You've asked a very good and controversial question. It's really up to you, and it's usually not a major problem. But in my experience, the best approach is to have your own attorney and let the bank have theirs.
Ronn Huth (800) 252-8937