Unlike attorneys, real estate brokers do not have the same professional duties of loyalty to their clients. In many states, brokers are permitted by law to engage in “dual agency.” This means they can legally represent both the buyer and the seller in a transaction provided the proper disclosures are made. This could be a problem, especially since the broker’s paycheck is reliant on the transaction closing. A lawyer, on the other hand, is required to only represent the interests of one party. Since a lawyer’s income is also usually not dependent on the sale actually going through, legal advice from the lawyer is more insulated from self-dealing than that from a dual agency broker.
Although a residential real estate transaction seems to be standard and dependent on many pre-printed forms, the process is the modern culmination of literally thousands of years of property law development. A real estate broker and a title insurance agent will have training in real estate, but when problems with the LAW arise versus the TRANSACTION it might not be readily apparent to the broker or agent. A lawyer, on the other hand, has a broader educational background in the law in general and will be able to spot problems before they arise in contract law, environmental law, regulatory law, and (but hopefully not) criminal law. In some cases it might pay to have a lawyer looking after your interests, especially in locales that do not have standard forms or escrow closings.
When a Residential Real Estate Attorney is Necessary
A person’s home is likely to be the most expensive investment they will purchase in their lifetime. Sometimes it might benefit a party to spend some time with a lawyer to make sure the transaction will proceed smoothly. Some times to ask for legal assistance include: (1) when a party is purchasing a home for the first time or in a new locale, (2) where the party did not have sufficient time to read up on the process, or where the process is unduly confusing, (3) where the party does not understand loan documents or the title insurance policy, (4) where the party’s gut instinct is telling him or her that the broker or agent is not totally looking after the party’s personal interests, or (5) whenever problems arise in the process relating to inspections, government compliance, or disputes between the parties relating to the contract itself.