Agent or Attorney? Choosing the Right Expert for the Job
By: Ronald R. Rossi
In October 2002, when I was writing my “Real Law” column for the San Jose Mercury News, we published an article on the need for savvy real estate agents. I am circulating the article again today because what was true 14 years ago is still true today.
Following my article on the importance of putting your property on the Multiple Listing Service (MLS) to generate as many offers as possible, I received this e-mail from a reader who had not yet read the column.
“Hello, Ron. I really enjoy reading your column in the San Jose Mercury News! I am thinking about selling my house, myself, ‘By Owner,’ that is. It’s very difficult for me to pass about $30,000 to a real estate agent, and since you are an attorney, perhaps you would be good enough to list the steps in general involved in order for me to do this.
“I’m sure I will need an attorney, one who specializes in real estate, but other than that, I’m unsure. I know that there is a title search involved, but who does this, the buyer or the seller? I would appreciate any assistance that you could provide. Thanks.”
Since this friendly reader isn’t the first and won’t be the last to ask these questions, let me answer this question here for everyone.
Dear Reader: It is relatively easy to hire a real estate attorney to draft the paperwork involved in the sale of your house, but the legal fees involved, no matter what the attorney’s hourly rate is, will run anywhere from $3,000 to $6,000 depending on the complexity of the transaction.
Any knowledgeable real estate attorney can fill out contract forms for your property and should be generally familiar with all the standard forms for residential real estate in use in today’s market.
However, the big question is, should you hire an attorney or an agent or both?
Let me put myself in your place and imagine that I’m a member of the public with no real estate knowledge. I want to sell my house in today’s market, generating the highest possible net return to me – that is, after paying all closing costs and commissions – and avoid any future problems, including claims, mediations, arbitrations and lawsuits. I have a choice of hiring an honest, knowledgeable, diligent real estate attorney or an honest, knowledgeable, diligent real estate agent. Which would I choose?
I’ve said it before, and I’ll say it again. I would choose the real estate agent.
Why is that, you ask? Well, it’s simple. A real estate lawyer knows more about the law than an agent does, even though many agents are very knowledgeable in that regard. But who can make intelligent decisions about how to market the property and get the highest return for your dollar? Who can place the property on the MLS and gain access to thousands of home buyers? Who will devote the time to show the property, hold open houses, create brochures, and work to sell that property?
Attorneys don’t do any of these things; this isn’t their area of expertise. One of the most important jobs you have is to choose a good, savvy listing agent.
You need an agent who’s familiar with what’s going on in the marketplace – price, value, terms. Good listing agents also have a list of reliable service providers who can perform pre-listing inspections.
One mistake people make is hiring listing agents who have little or no experience or who have ulterior motives (such as the one in my previous column who talked my client out of using the MLS). Too often, people hire agents who don’t know the contract documents well enough, who aren’t as familiar with market conditions as they need to be, or who are stupid, lazy, greedy or any combination thereof.
If you’re going to pay out $30,000, pay it to someone who’s going to get the job done for you and maximize your return. The best real estate attorney in the world can’t do as good a job for you as a skillful, experienced agent who’s looking out for your best interests.
If the paperwork is still a concern, a real estate attorney can review it for you in an hour or two, with minimal legal fees. Of course, those of us in real estate litigation would be happier if you hired a stupid, dishonest, lazy agent and didn’t ask anyone to review the forms for you, because we could end up handling a very expensive lawsuit for you some years later. (Just kidding.)
I’ve written many articles on how to choose a good listing agent in the past. If you would like copies, send me an e-mail. Since I’m answering your question in my column, there’s no charge for this particular piece of legal advice.
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