What Real Estate Agents Should Know About Working With Attorneys
Since real estate is a people business, having a strong network of positive business relationships is one of your most valuable assets. Real estate agents and real estate attorneys are required to work alongside each other on many occasions, especially in states that require that an attorney be involved in the sales or closing process. It’s something that’s often not talked about during the real estate education process, so we created a guide to help agents navigate future working relationships.
Sometimes, the working relationship is smooth and seamless. Other times, both parties just want the deal to be over so they can walk away. As a real estate agent, building healthy business relationships is crucial when working with clients.
Agents and attorneys can actually have a healthy working relationship and sometimes become a remarkable team. An attorney that you’re familiar with can quickly help you resolve conflicts before they escalate. Though you can get an attorney whenever you need one, things move fast in real estate. While your new attorney is trying to get a hold of things, your commission could go out the window.
So, we asked some of the leading real estate attorneys in the industry to elicit their thoughts about having better work experience with real estate agents.
Here’s what they had to say:
How do real estate attorneys spend their day at work?
It’s a lot easier for real estate agents to efficiently work with real estate attorneys if they understand attorneys’ precise work scope and how they contribute to real estate deals – not just the end product of signing paperwork.
So, how do real estate attorneys spend their day? Monica Beffa- Lawyer and founder of Beffa Law explains.
“As a real estate lawyer, we start by reviewing and filing the property agreement documents. We prepare and register forms relating to their mortgage and financing. Not only do we make sure the clients’ rights are protected and don’t fall in any legal traps, but we also complete the transaction process for them, guaranteeing a complete and safe transaction,” she said.
And that’s not all.
“A day in the life of a real estate attorney involves dealing with all of the expensive mistakes that parties in real estate transactions can make. This ranges from co-ownership disputes, title defects, and escrow scams to second and third priority lien disputes,” according to Scott Talkov, a real estate attorney, broker, and president of Talkov Law Corp. in Riverside, California.
Heather James – Partner and co-founder of Cook & James shed more light on this.
“No day ever really looks the same for us, and a closing attorney is pulled in a lot of directions. Between clearing title issues, sitting in closings, managing scheduling conflicts and changes to appointments, doing marketing events, client management and other administrative tasks, we are juggling and multi-tasking… just like agents!,” said James.
In essence, real estate attorneys often end up wearing multiple hats at different times of the day.
Here’s how agents and attorneys can work together efficiently and end up building a healthy business relationship.
Understanding where to place the client’s interest
Since real estate attorneys and agents both work for the client, it is important to understand exactly where to place the client’s interest while working together.
“Brokers and Realtors can work with a real estate attorney by showing the highest regard for the fiduciary duty of an attorney to place the interests of the client above their own. When preparing broker price opinions, provide only the most easily defended facts about the property,” according to Talkov.
What about states where clients are not required by law to get an attorney?
“Even though some state laws permit title agents to close loans, it is always advisable to have an experienced real estate lawyer to quickly troubleshoot complex legal matters that unfold on the closing day. A real estate agent that works closely with an attorney should strive to make sure that the attorney is kept in the loop and informed on all critical details of a pending sale,” according to David Reischer, real estate attorney and CEO of LegalAdvice.com.
According to Talkov, “When disputes are involved, be careful of flippant emails that may end up being Exhibit A to a legal brief. Of course, when in doubt, call the attorney for the client to ask for the best course of action.”
Keeping each other in the loop
According to James McGrath, co-founder of the NYC real estate brokerage Yoreevo, “New York is an attorney state, so we have two of them on every deal. We have found without a doubt the #1 thing real estate agents and attorneys can do to work well together is over communicate.”
McGrath explained further.
“The attorney should be updating the agent about the status of the contract, and the agent should be letting the attorney know about any deal related items that have come up (like inspection findings). Even if there is no update, that’s a helpful update. If the attorney tells the agent, “We’re still waiting on a response to our comments,” it allows them to poke the other agent and see if they can move things along,” he said.
McGrath suggested that emails make multi-tasking easier.
“If you want a quick answer, always email instead of call because it’s so much easier for us to respond on the keyboard while juggling other tasks,” said James.
More so, effective communication is one of the most reliable methods of building healthy business relationships.
How agents and attorneys can work together efficiently
Placing the client’s interest above all others, Monica Beffa explains the key benefits of agents and attorneys working together efficiently.
“Real estate lawyers and realtors working together often makes life easier for the client. A realtor can push for a timely completion while lawyers can ensure the deal will close. Regular communication is needed for negotiation, clarity, and transparency. By doing so, everyone stays on the same page, and the client leaves satisfied at the end,” says Beffa.
However, there is the need to hire the right attorney for the right deal.
According to Bill Samuel of Blue Ladder Development, “It is important to first make sure that your attorney specializes in the exact type of transaction you are using them for. Law is a very broad category, and you will get the results out of someone who has specific experience in the task you are hiring them to do (real estate closing, eviction, etc.).”
It’s also important for real estate agents to remain patient.
“Realtors should understand that good real estate attorneys often have dozens of clients who are under or almost under contract at the same time and have practices that are structured for efficiency and proper workflow, which is why attorney fees for real estate attorneys are generally very low,” says Rajeh Saadeh, a real estate attorney, investor, and professor.
Also, knowing exactly what to expect is key.
“I think it is also important to get an engagement letter upfront from your attorney that outlines the services they provide and their corresponding fees. Keeping most of the communication in email, in my opinion, is the most efficient way to work with one another, and always responding in a timely manner is key as well,” adds Samuel.
Why attorneys and agents must be on the same team
Being on the same team means working together to achieve a common goal, not necessarily working as team members or as colleagues.
“Realtors should know that real estate attorneys are indispensable people to assist in making sure that a property transfers from seller to buyer. An experienced real estate attorney can usually put out any potential fires that might delay or derail a closing,” according to Reischer.
Saadeh shared his thoughts too. “Comparatively, realtors often do not have nearly as many clients at a given time who are under or almost under contract, which explains why realtor commissions are generally much higher.”
“This also explains why realtors often have more time than real estate lawyers, and have more perspective as they are on the ground dealing with the actual property and the other side as opposed to in the ivory tower of an office dealing with the transaction, to devote to the client and do what needs to be done outside of the attorney’s role to get the deal to closing,” said Saadeh.
Understanding how attorneys work, makes it easier for agents to work with them more efficiently.
How each party can focus on their role
Playing your role as expected in every deal is essential. But sometimes, it seems only one party is actually working while the other is dragging.
According to Saadeh, “If the realtor can understand that dynamic and can focus on effectuating their end of the deal, specifically by coordinating inspections and appraisals, enabling and following up on the government for any approvals that need to be obtained, and making sure the buyer is doing what needs to be done to get their loan.”
According to Reischer, “An experienced real estate attorney is worth their weight in gold to make sure closing documents arrive on time and that the closing documents are properly executed and that funds are correctly distributed.”
“The attorney should take care of drafting and revising the contract documents, ordering and reviewing titles, and going over the closing figures and helping the buyer and seller sign whatever is required, that way, the deal will go as smoothly and efficiently as possible,” explained Saadeh.
Impacts of COVID-19
The novel coronavirus pandemic has triggered several discussions about the new normal in real estate. The impact of COVID-19 means both agents and attorneys have to do some things differently.
According to Heather James, partner and co-founder of Cook & James, “COVID has dramatically changed the day in the life for a real estate attorney – we are responsible for and therefore the end of the line for new cleaning and sanitizing protocols, buffers during appointments, innovating and executing our new curbside option, and more.”
“Not all files are equal, and here’s why that’s unpredictable. Different files require different time commitments based on a number of factors which can include title issues, delays from a lender or the parties themselves or even in obtaining title. And COVID has only amplified this,” says James.
“All that being said, yes, we are busy, but we are 100% on the team. While some items we request may seem so minute that we are attempting to delay closing, it’s really the opposite. If we don’t dot each and every i and cross every t, the closing really WILL be pushed back, and then nobody gets paid. Including us,” she explained.
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