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Real Estate Lawyers vs Real Estate Agents

Are you buying or selling real estate? You should know the difference between real estate lawyers and real estate agents. They provide complimentary but different services. It may seem obvious, but the differences are often misunderstood.  If you understand the difference between real estate lawyers and real estate agents, you could land better real estate deals. Before we look at the differences, let’s consider some common mistakes.

A common mistake home buyers make  is relying on real estate agents for services real estate lawyers provide. This creates a mess that often results in deals falling through. Another mistake is failing to insist that real estate agents provide proper service. This happens because real estate buyers and sellers mistakenly believe that a real estate lawyer will provide services that the real estate agent should provide. The consequence is either costly disputes or failed the deals.

Your real estate deal is more likely to succeed when the real estate agent and the real estate attorney complement each other. So, what are the different roles played by real estate agents and real estate attorneys? Let’s take a look.

Real Estate Agent Make Deals While Real Estate Lawyers Evaluate Deals

The real estate agent’s primary role is as a deal maker. They must ensure that there is an agreement between the real estate buyer and the seller. The agreement must include a clear understanding of what the buyer and seller are getting from the deal. It is not sufficient to merely identify a property address and the price. The understanding must include all the items included in the purchase and their condition. It should also include the terms of purchase such as contingencies and preconditions.

The real lawyers’ role is to transcribe the understanding of the buyer and seller into a contract. It is not to negotiate a deal. If your lawyer must negotiate the deal, then your real estate agent did not provide the service you are paying for. Importantly, deals tend to fall through the crack when lawyers are making things up as they write the contract of sale. A consequence is disagreement that causes the transaction to fail.

A fix for this problem is to ensure that the real estate agent prepares a detailed deal sheet that fully captures the parties understanding. There should be little room for changes by lawyers later.

Real Estate Agents & Real Estate Lawyers May Not Have the Same Incentives

Real estate agents get a commission from the sale price of a real estate. So, they have an interest in ensuring the sale closes. On the other hand, the real estate lawyer gets either a fixed or an hourly fee. Therefore, the lawyer does not have a pecuniary interest in closing a real estate transaction. The real estate lawyer focuses on the best outcome for the client not closing the sale at all cost.

Risk Assessment vs. Racing to Close a Deal

A major role played by a real estate lawyer is risk assessment. This includes assessing current and future risks. When risk is factored in, a transaction that appears to be a good deal may not be advisable. Real estate agents do not have a duty to assess the risks involved in a real estate purchase. The real estate agent’s job is simply to find the property that best fits a buyer’s desire. This may be done without considering risk factors. Real estate agent may ignore risks factors because they have a pecuniary interest in the transaction. If your real estate lawyer is not doing risk assessment, you may not be getting your money’s worth.

The Benefits of Compliance vs. The Cost of Noncompliance

There are several laws and regulations that must be complied with in a real estate sale. The real estate lawyer plays an important role in identifying these laws and rules and ensuring compliance. Real estate lawyers ensure that zoning laws do not prohibit the use of the property for a purpose you intend to use it. Additionally, your real estate lawyer ensures compliance with the terms of the contract of sale. This function overlaps with risk assessment.

Conclusion

Your real estate deal doesn’t have to fail. You could avoid costly consequences from unnecessary disputes. Retaining a real estate attorney early in the real estate sale process could be the difference between a good and bad deal. It increases the likelihood that your real estate agent and real estate attorney provide complimentary services. Don’t Wait until your real estate agent strikes a deal to hand the transaction off to a real estate attorney.

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