Common Real Estate Law Questions and Answers
Q: Do I Have to Hire a Traditional Real Estate Broker to Sell My House?
A: The short answer is “no”, but like any situation there are benefits and drawbacks either way you go.
Q: Can I Hire an Attorney to assist with a Real Estate Transaction?
A: Yes. The web has transformed the way people buy and sell real estate. Today there aren’t many secrets to buying or selling a house. Most people just need an experienced hand in negotiating and closing the deal, and they shouldn’t have to pay a full commission. We work for a 1.5% commission that is less – sometimes WAY less – than what you would pay a typical agent.
Q: What if I Just Want to Make an Offer on a house without an Agent?
A: A lawyer can assist with this, however most buyers agents are paid by the seller at closing, unless the transaction is a non MLS transaction in which the seller states the buyers agent will not be paid by the seller. Therefore in an MLS transaction an attorney can rebate back to the buyer a percentage of the commission or charge a flat fee for each offer drawn up on behalf of the client.
Q: What are the professional costs associated with a Real Estate Transaction and How Much Can I save by Hiring a Lawyer?
A: Most residential real estate transactions in Washington involve licensed real estate brokers, in which a buyers broker is paid 3% commission and sellers broker is paid 3% of a commission. These brokers are usually part of the Multiple Listing Service (MLS) in which MLS forms are used and the language in the forms are standard and required if listing a property on the MLS. Brokers are allowed to fill out the forms but not make changes to the forms.
If you use an attorney, they can use their own forms or amend the MLS forms to whatever language they want to use which doesn’t require the standard commission fee’s be paid if the property is not listed on the MLS. Therefore your attorney could charge a commission of 1.5% instead of 3% or a flat fee and then state that the buyers broker has to be paid by the buyer. This would create a significant savings for a seller even if the seller has to contribute something to the buyers agent which can be negotiated.
Q: Why Hire a Lawyer Instead of a Real Estate Broker?
- In this crazy hot Seattle market just about everything is going fairly quickly and you could list as a FSBO non MLS or submit through an MLS directory or hire a lawyer who is also a broker to list on MLS which will get picked up by Redfin, Trulia etc. My take is that most active buyers are on Redfin constantly checking houses so the MLS is becoming less necessary, especially in the Seattle market.
- You could also always go MLS/Broker if you don’t get the price you want initially.
- The amount you could potentially save by not having to pay high agent fee’s most likely exceeds what an agent would increase the sale value by actively marketing the property. As an example you could save up to 4.5% and on a $700k house that is $31,500!
- You don’t need to list the property online as you already have a buyer lined up.
- A lawyer is better equipped to negotiate a short sale on your behalf should the need arise and deals need to be worked out with the bank as well as a buyer/seller so that the bank will accept less than they are owed if a property is underwater.
- A lawyer has much more education than a broker and in essence you are getting the benefits of having your own lawyer on a transaction as well as an agent to review for what most people is the largest purchase/sale they will make. In fact a handful of lawyers or both licensed attorneys and brokers.
- Additional home tours, staging, videos etc. and the more traditional broker services can always be added to any transaction at cost or for a flat fee, although most basic transactions would not include these services.
Q: When would hiring a Traditional Real Estate Broker make more sense?
- You feel that your property would benefit significantly from the contacts of your agent in marketing and showing your property outside of what listing the property online would bring.
- You simply don’t have any time to deal with showing your property and don’t mind paying the extra cost for more hand holding, house tours and house staging throughout the buying and selling process.