The Home Buying Process with WaLaw Realty: Using a Lawyer as a Real Estate Agent

What’s it like to buy a house using WaLaw Realty?  How does the experience differ from using a traditional real estate agent to buy a house?

We’re quite a bit different than your average real estate agent, but we still provide the services you need. The difference starts with the fact that we are your lawyer as well as your agent, but it certainly doesn’t end there. Overall, we provide superior representation for a lower cost.  Now that’s different!

We Protect Your Interests, Not Our Own – No Exceptions

The difference in the home buying process begins right when you hire us. Unlike a typical real estate agent, we are your lawyer too. As your lawyer, we owe you a whole set of very significant legal obligations.  In a nutshell, a lawyer is required to put the interests of the client first, ahead of even self interest, and the client has the right to know of and specifically consent to any conflict of interest.  (The term “conflict of interest” includes any opportunity or incentive to put somebody else’s interests ahead of the client’s, regardless of whether the attorney actually does so.)  Moreover, the attorney must “reasonably believe” that he can provide competent representation regardless of the conflict.  If the client does not consent after the attorney explains the conflict, or if the attorney does not reasonably believe that he can provide competent representation despite the conflict, then the attorney simply cannot represent the client.

How is this different? A real estate agent’s obligations to the client are far less stringent than those of a lawyer.  Agents must only disclose a conflict of interest; they have no obligation to explain it or get the client’s consent, and they have no specific obligation to avoid a conflict that will limit the agent’s ability to represent the client.  In contrast, as lawyers we don’t just disclose a conflict, we confirm it will not impair our representation of you, and we make sure you understand and consent to it.

How might this play out in the real world? It is not uncommon for a real estate agent to represent both the buyer and the seller in a transaction. As lawyers, we would never do that because of the clear conflict of interest (the seller wants the highest price, the buyer wants the lowest).  We represent one side of a transaction, period.  Moreover, a seller can offer an extra “bonus” commission to a buyer’s agent who sells the house, above and beyond the typical commission of 3%.  The buyer’s agent does not have to disclose this strong personal incentive to sell his client one house – the one with the bonus commission – rather than another.  As your lawyer, if we were paid by commission we would have to tell you about this bonus, a clear conflict of interest.  But we avoid that trap entirely. Since we work for a flat fee, we have no incentive whatsoever to steer you to any particular house.  It’s your decision and we don’t try to influence it.

You Find the House, You Save the Money

We generally rely on our clients to do much of the initial leg-work in finding a home.  Years ago, you had to hire an agent simply to find out which homes were for sale. With the internet, those days are long gone: 90% of all home buyers now use the intenet as an information source in finding their next home. Anyone can search the MLS listings from dozens of different search engines on various broker sites, including WaLaw’s MLS Search.  So why pay your agent 3% of the purchase price if you’re doing the work?

We Show You Houses

Once you’ve narrowed down your list of houses, give us a call.  Like a traditional real estate agent, we will open the doors and show you the homes. As a general rule, you don’t want to use another agent because, by doing so, you may be giving that agent a claim to “your” commission (since we rebate it to you in full, we think of it as yours). Plus, when you’re ready to make an offer on a house, you’ll want our input as to value, and our input will be much more meaningful if we’ve actually seen the house.

As Your Lawyer We Provide Legal Counsel

We provide legal counsel specific to your situation.  An agent is allowed to practice law only by filling in the blanks of pre-printed forms that were originally drafted by a lawyer.  In contrast, we ARE lawyers so we have no such restriction on our practice.  Does your situation call for a unique term in the contract?  No problem, we can draft it.  Want to know that the title looks good?  We’ll make sure.  We understand preliminary title reports and can alert you to any problems with title, and we fix them if possible (and if not we assist you in getting out of the contract with a full return of your earnest money).

You Get the Commission!

Finally, the best part: We rebate the commission we are paid as your agent!  Most sellers offer a 3% commission to the agent who represents the buyer who buys the house.  When we’re that agent, we rebate 100% of the commission, less our fee and applicable taxes, to our client at closing.  This rebate reduces or eliminates your out-of-pocket closings costs, which are usually several thousand dollars.  If all of your closing costs are paid, we apply the rest of the rebate to the purchase price, thus reducing your down payment and your monthly mortgage bill.  If you buy a $500,000 house, you can look forward to a rebate at closing of nearly $11,000!

In many ways, using WaLaw is no different than using a typical agent: We give tours, draft contracts, and help you through the home buying process. In other important ways, though, the WaLaw experience is unique, at least here in Washington where lawyers generally do not participate in the home buying process. (We’re working on changing that!). We provide you with all of the benefits of a real estate agent, along with the skill, knowledge, and obligations of a lawyer whose practice is focused on real estate.  And we charge a lot less.  Are we different? You bet!

Posted by Marc

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2 Responses to “The Home Buying Process with WaLaw Realty: Using a Lawyer as a Real Estate Agent”

  1. Carl Berard says:

    Hi Craig,

    I find it interesting that you can rebate a buyer the commission paid by the seller.

    Can you tell me how you get around the ***disclosure issue to lender*** and legality of rebate to buyer from your firm gained through fees paid from the seller?

    I realize several firms are doing this yet, do we not as agents & lawyers owe a full disclosure obligation to all parties in the transaction including The Seller & Lender?

  2. Craig says:

    Carl, you bet we have a duty of full disclosure and we comply with it. The fact of our commission rebate is included in the PSA, which of course is provided to the lender. Moreover, to avoid any last minute problems, we speak with the lender to confirm that they are aware and approve of our rebate and how it will be handled.

    Can you provide a little more analysis as to why you apparently think a rebate is not legal? It is legal if fully disclosed and you better believe we fully disclose it.

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