RULE #1: Sales and Purchases of Real Estate are LEGAL TRANSACTIONS - usually the largest transactions in our lives. A Real Estate Lawyer’s review of each legal transaction is the “best practice.” Often overlooked by buyers and sellers and agents/brokers, early legal review of the transaction is essential to limit or avoid litigation.
Compare the cost of early legal review (see above) to the risk and cost of a legal issue arising. Apply the 80/20 rule. 80% of the legal issues will likely not surface; but 20% of the legal issues will. Early legal review will address the problems before they happen and prevent the termination of the contract or losing of the property. Later legal services, on the other hand, required to defend property rights will well exceed the cost of the early legal review.
Legal Review up front is recommended as a one-time, transaction by transaction, expense. Such costs are similar to the insurance that we all purchase every year. Like insurance, early legal services provide peace of mind. And, with early legal services, The Gilroy Law Firm imparts legal knowledge and grows its clients’ real estate prowess.
The Rule, therefore, is: Engage in a legal transaction, binding yourself (and your assets) to a Contract, only after legal review.
RULE #2: Sales and Purchases also involve MARKETING.
Real Estate Brokers/Agents are marketers of real estate. They connect buyers and sellers. Commissions charged by those agents/brokers are negotiable, but standards range from 6% -10% of the Sale Price. In an average house sale, i.e. $300,000.00, that is $18,000.00 of commission at 6%. If it were a vacant land sale at $300,000.00, the commission would be $30,000.00.
These days, buyers and sellers alike are choosing to avoid these commissions and attempt to sell the property themselves through FSBO, REDFIN, ZILLOW and ZOOMSALES.net. These are wonderful and inexpensive vehicles for marketing the property and for finding properties for sale.
The Rule, therefore, is: Engage a Real Estate Agent/Broker when necessary to market or find property.
Note: The Gilroy Law Firm has just launched ZOOMSALES.net for its Clients who want to sell their properties by owner, i.e. without a real estate agent’s percentage commission. Read more.
RULE #3: Good Real Estate Lawyers are Deal Makers, not Deal Breakers.
For decades, Gilroy has worked with the marketers, i.e. Real Estate Agents/Brokers, to make real estate deals happen. From the beginning of the legal transaction to the end, The Gilroy Firm works hard to save deals from breaking over the standard contracts provided by Real Estate Agents/Brokers and individuals. The Gilroy Law Firm, of course, prefers to draft the custom contract for each transaction that ensures that all obligations and duties are well executed – and everyone benefits, even the marketers.
The Rule, therefore, is: Custom Contracts help parties see and understand their transaction.
RULE #4: Good Real Estate Agents/Brokers recommend Real Estate Lawyers First.
For decades, The Gilroy Law Firm has advocated that Agents/Brokers should welcome real estate lawyers into the legal transaction that the agents have brokered. Most Agents/Brokers usually admit to only recommending a real estate lawyer’s involvement after an issue arises. This is a “bad practice” that costs the Agent/Broker and their customers much more in legal fees than the preventative legal work outlined in Rule #1. Good Real Estate Agents engage in the “best practice” of having their customers obtain legal review – first - just like the Agent/Broker’s standard contract suggests should happen.
A Real Estate Lawyer’s involvement in the legal transaction protect the buyer and seller from legal issues and protects the Agent/Broker from being tempted to provide the necessary legal advice in a transaction. – which Agents/Brokers are not licensed or qualified to provide. If and when Agents/Brokers provide legal advice or begin to draft clauses in a contract, the Agents/Brokers are exposed to personal legal liability.
RULE #5: Real Estate Agents/Brokers should not be confused with Real Estate Lawyers.
New Buyers and Sellers usually confuse Real Estate Brokers/Agents with a Real Estate Lawyer. And, that confusion is exacerbated by Agents/Brokers not encouraging their buyers/sellers to obtain early legal advice. The Agent/Broker sales commissions are large; therefore, recommending more expenses is not an easy discussion for Agents/Brokers to have. But, maybe there is a compromise of commission to allow for an Agent/Broker customer to have early legal review of the Agent/Broker’s standard contract. The legal review protects the Agent’s customer. Real Estate Lawyers are an essential, yet affordable, expense to make the deal happen and avoid any legal issues in the long run.
SCHEDULE A WORKING MEETING TO DISCUSS YOUR REAL ESTATE SALE OR PURCHASE
“The Professional Legal Service Provider since 1994”
