Protecting the Deal: Why Good Deals Need Both Brokers and Attorneys
From LOI to closing, early collaboration avoids re-trades, reduces risk, and keeps transactions moving
By: Eric A. Gravink
In commercial real estate, brokers play a central role in getting deals done. They are often the driving force behind a transaction, evaluating the economics, identifying opportunities, and guiding buyers and sellers toward a workable agreement. For most clients, those economic terms are the most important part of the deal, and experienced brokers bring real insight to that process. They understand the market, know how to position a deal, and help their clients make informed decisions about value and risk. They also do the hard work of keeping deals together, managing expectations, navigating personalities, and pushing transactions forward when they might otherwise stall. Many of the matters I handle come from broker referrals, and that is not by accident. Strong brokers recognize that when their clients are well advised across the board, transactions are more likely to close and close cleanly.
At the same time, every commercial real estate transaction operates on two tracks. One is economic. The other is legal. Both matter, and the two are tightly connected whether the parties focus on it early or not. When the legal structure is not addressed at the outset, risk does not stay contained. It tends to grow as the transaction moves forward, often surfacing at the worst possible time.
A common approach is to wait to involve an attorney until after the letter of intent (LOI) is signed. The thinking is to get the business deal done first and deal with the legal details later. While that may seem efficient, it often creates avoidable friction. The letter of intent is not just a summary of price and basic terms. It sets the framework for the entire transaction. Even when labeled non-binding, it anchors expectations and shapes how both sides view the deal going forward. If it is incomplete, unclear, or internally inconsistent, those issues carry directly into the purchase agreement stage.
Clear non-binding language is critical, and most experienced brokers handle it well. The more common issue arises elsewhere. Certain deal terms are agreed to that seem reasonable at first, but carry consequences that are not immediately obvious. These can affect timing, economics, and in many cases, tax treatment. By the time counsel is brought in, those terms are already agreed to in principle, and unwinding them becomes difficult.
This is the point in the process where I often find myself pausing and asking a client why a particular provision was included in the LOI. Not because anyone made a mistake, but because the impact of that provision was not fully apparent at the time. Those conversations are rarely easy. A client believes they have a deal in place, and now we are discussing how certain terms may create unintended exposure or negative consequences. From the broker’s perspective, it can feel like the attorney is slowing the deal down or even putting it at risk. In reality, the goal is the opposite. The goal is to address issues early enough to keep the transaction from running into more serious problems later, when the stakes are higher and the options are fewer.
Early legal involvement helps prevent that situation. It is not about second guessing the business deal. It is about identifying where a term that looks straightforward may carry downstream consequences. A well-structured LOI does not need to be long or complex, but it should reflect not just what the parties want, but how those terms will actually work in practice.
Similar challenges arise with the use of standard form agreements such as AIR and CAR commercial contracts. These forms serve a purpose. They are familiar, efficient, and can work well in smaller or more straightforward transactions. The issue is not the forms themselves, but the assumption that they can be applied to every deal without meaningful customization. Commercial transactions vary widely, and standard forms cannot anticipate every structure, risk allocation, or property-specific issue.
On the seller side, this often shows up in property information sheets and disclosure provisions that expand the scope of what the seller is representing about the property. What appears to be routine can increase exposure if it is not carefully reviewed and tailored. On the buyer side, the use of a familiar form can create a false sense of completeness. The agreement looks comprehensive, but if it does not address the specifics of the deal, important gaps remain.
When a transaction does not fit neatly within a standard form, the typical solution is to add an addendum. These are usually prepared in good faith to capture the agreed upon business terms. The challenge is that addenda often focus on the headline points while leaving out the details that control how those terms actually operate. Timing, sequencing, conditions, and what happens if a condition is not satisfied are frequently underdeveloped. Because these provisions are layered onto an existing form, they can also create inconsistencies within the agreement, making it unclear which terms control. These issues tend to surface only when there is a problem, which is precisely when clarity matters most.
This is also where the line between brokerage and legal drafting becomes important. Brokers are highly skilled at structuring deals, but they are usually not licensed to draft legal provisions. When documentation moves beyond filling in blanks and into creating new contract language, the risk increases. That is not a criticism. It is simply a recognition that different parts of the transaction call for different types of expertise.
An alternative that is sometimes viewed with hesitation is the use of a custom purchase and sale agreement drafted by counsel. There can be a perception that a custom PSA is more complicated or more time consuming. In practice, when expectations are set properly, the opposite is often true. A well-drafted custom agreement allows the parties to incorporate the specific terms of their deal in a way that is internally consistent and easier to follow. It avoids the need to layer multiple addenda onto a form and reduces the risk of conflicting provisions.
Custom agreements also tend to make the negotiation process more efficient. When attorneys work from their own templates, they are familiar with the structure, know where key provisions are located, and can revise terms more quickly. Exchanging drafts becomes more straightforward because each side is working within a coherent framework rather than trying to track how multiple addenda interact with a base form. Although it may seem counterintuitive, it is often more time consuming to revise a standard form with multiple addenda than to start from a clean, tailored agreement. Even experienced attorneys can struggle with the internal cross references and embedded provisions that need to be identified, modified, and kept consistent throughout a heavily amended form contract.
When introduced the right way, custom PSAs do not create friction. They reduce it. They provide clarity, align the documentation with the actual deal, and make it easier for all parties to understand their rights and obligations. In that sense, they do not just protect one side of the transaction. They protect everyone involved by reducing the likelihood of misunderstanding and dispute.
All of this points to a practical conclusion. Involving an attorney early is not about adding cost. It is about preserving value. Legal fees are often viewed as something to minimize, but in the context of a commercial real estate transaction, that can be a false economy. The cost of fixing issues mid deal, renegotiating under pressure, or addressing disputes after closing is almost always greater than the cost of getting the structure right at the beginning.
None of this suggests that transactions should be over engineered or slowed down unnecessarily. The goal is not complexity. It is clarity. When brokers and attorneys work together, each contributes what they do best. Brokers drive the economics and maintain momentum. Attorneys ensure that the agreed upon terms are translated into a structure that holds up if circumstances change.
For buyers and sellers, the takeaway is straightforward. Engage a competent attorney early enough to have a meaningful impact, particularly at the LOI stage where the framework of the deal is established. For brokers, encouraging that early involvement is not a risk to the transaction. It is a way to protect it and increase the likelihood that it closes without unnecessary disruption.
Everyone involved shares the same objective. A transaction that closes and continues to hold together after closing. That outcome is far more likely when the foundation is set correctly from the start, with the right people involved at the right time.