4 Big Differences Between Real Estate Agents and Lawyers
We are, first and foremost, lawyers. As lawyers, we are able to – and legally required to – provide representation to our clients that is far more sophisticated than what you’ll get with a real estate agent.
1. Duties to clients
The vast majority of real estate agents are ethical and do their best. But by law, their duties to clients are limited, so there’s a lot of gray area they can work within.
For example, an agent can represent both the buyer and the seller in the same transaction. That’s weird, since a buyer’s interest is in direct conflict with the seller’s interests – one wants the lowest possible price while the other benefits from a higher price.
And the agent can “self-deal,” which means she can represent the seller AND buy the property herself. This isn’t in the best interest of the seller by any means.
On the other hand, attorneys have clear and unequivocal duties to their clients that cannot be compromised by the lawyer’s self interest. And lawyers certainly won’t (and can’t) represent both the buyer and seller. If an attorney has been hired by a seller to assist with the sale, the attorney cannot buy the property. The client’s interests must be paramount, without any question or doubt.
Who would you rather have on your side?
2. Compensation and incentives
Agents are typically paid by commission, which is only paid when the deal is closed. No deal? No money.
The result is that agents might pressure clients hard on properties to get the papers signed – even by adding incentives for the buying agents without telling their clients. And agents aren’t required by law to disclose any external arrangements that may affect their recommendations. All in all, there can be a genuine conflict of interest between agents and their clients.
As lawyers, we’re paid directly by our clients and don’t accept any portion of commission available to us as agents. It’s a fair, flat fee with additional fees for more complicated transactions or additional services discussed upfront.
So if closing isn’t in your best interest, we’ll tell you so. Want to cancel a deal? No problem. We’re not going to push you into making any decision. Or, for that matter, prevent you from making one either.
3. Legal counsel
Real estate agents are only authorized to engage in the limited practice of law. Basically, this means that they can fill in pre-printed forms that were drafted and approved by a lawyer.
Agents aren’t supposed to provide legal counsel to a client, so they’re not authorized (or trained) to explain contracts and legal terms to you. Have a unique situation and need some language added to a contract? They’re not authorized to do that either.
When it comes to title issues, agents aren’t equipped to help you either. They can’t give clients any opinion on the condition of title or the significance of the information in a preliminary title commitment. That puts BOTH buyer and seller at risk that could come back to bite you months and years down the road.
Lawyers are lawyers because we’ve been trained and authorized to practice law. A four-year college degree PLUS a three-year graduate degree from law school PLUS passing a grueling “bar exam.” It’s a lot of work.
Got a question about your contract? We can answer it. Concerned about an issue or aspect of the transaction? We can deal with it. Worried about a defect in title? We can address it.
You’re looking at a purchase worth hundreds of thousands of dollars. It’s common sense to hire a lawyer who is able, authorized, and obligated to fully protect your legal interests.
4. History and culture
Historically, agents were salespeople just like the guys who sell cars. Remember Glengarry Glen Ross and the brilliant “motivational speech” Alex Baldwin gives in it? Even today, the buyer’s agent is officially known as the “selling agent.”
Lawyers have always provided representation, period. We’ve never been paid to convince our clients to buy something. We can always help ourselves to a cup of coffee.
If you’ve gotten this far and you’re still not convinced, we’re probably not a great fit for you. But if you’ve been nodding throughout this page, then give us a call.