Most real estate attorneys can help with the composition of an offer, give good legal advice, and may even have E&O insurance to protect you from fraud or negligence. They might even offer a little real estate-related tax advice if needed. Sounds good, right? It could be, but let’s look a little closer.
I have composed a spreadsheet comparing the two. Notice the vast array of other services and expertise provided by a Real Estate Broker vs. an attorney.
Don’t get me wrong. A good attorney is probably going to be better in some areas than the average real estate agent. But I never think you should settle for average. Attorneys definitely have their place. A good Real Estate Broker however will pay for himself in almost every transaction with his negotiating skills alone. Whereas an attorney’s motivation is not necessarily aligned in every way with yours. An attorney is about billable hours. A good Real Estate Broker is all about doing a stellar job, saving you every penny possible so you will refer business to him in the future.
There are over 100 action items a good real estate broker will take during every real estate transaction. An attorney does a few of them… but a Real Estate Broker does them all. Let’s compare…
|Real Estate Broker||Attorney|
|Fees||% of contract price||Hourly|
|Compose purchase / sale agreement||✔||✔|
|Expert in negotiating the detailed terms of the purchase / sale agreement.||✔|
|Supply vendor referrals (home inspector, lenders, title insurance company, escrow company, contractors, architects, engineers, surveyors, etc.)||✔|
|Help rectify any derogatory credit issues buyer may be experiencing.||✔|
|Guide buyer through lending process||✔|
|Provide oversight for buyer at home inspection||✔|
|Expert interpretation of sometimes technical or ambiguous home inspection reports||✔|
|Recommend which corrective action may be advised based on inspection reports||✔|
|Guide buyer through all aspects of real estate transaction||✔|
|Ensure your legal protections for buyer||✔||✔|
|Provide Errors & Omissions Insurance to protect buyer from fraud and negligence||✔||?|
|Provide written, defendable value opinion to buyer to assist in negotiations||✔|
|Provide seller with working capital to make home repairs / upgrades prior to sale.||✔|
|Advise buyer on strategic financing approaches to purchase property.||✔|
|Advice on real estate-related tax matters.||✔||?|
|Cost Savings||Fixed fee determined up front.||Depends on complexity and billable hours. Unknown.|