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So Your Friend/Cousin/Uncle Is An Attorney, Eh?

By
Real Estate Agent with Leigh Brown & Associates, RE/MAX Executive

Today's closing drama, brought to you by the numbers '$550' and 'I' (that's short for "I don't DO real estate closings on a regular basis")

Buyers and sellers. We know that you have friends and family members who are attorneys.  We as real estate professionals applaud them for surviving the three (or more) grueling years of law school!  However, you should know that just because they had to study real estate law as a course or two while in school, they may not be experts in real estate law.

Case in point.

*Allow me to preface this story by saying that I am NOT a lawyer and that North Carolina's policies and traditions may be different than those in your state.  Please consult a local expert!* 

My closing today (I represented the seller) was a fiasco.  The buyer's agent had originally selected a local real estate attorney for the closing-he's very good and very efficient.  But then the buyer wanted to change to a 'friend of the family' who would 'do her closing as a favor'.  (In NC, the buyer, seller, and lender are all represented by the same attorney at closing, buyer selects).

Define 'favor.'  We'll start with the fact that he charged her $100 than the first guy her agent recommended.  My seller was planning to attend closing, but his wife couldn't get off work for the drive (they now live out of state), so her documents needed to be sent to her and notarized before closing.  My assistant chased that attorney for three weeks trying to get the documents sent to the wife-he kept saying he was 'too busy' and 'would get around to it' or that he was 'tied up in court.'  Aha.  We finally get the docs sent down at the last minute.  The lender dragged around sending the package (for a 10a closing today, package finally arrived at 9a but the paralegal didn't know how to open the email....aaarrrrrghhhh.....).  Could the attorney call them and ask for it?  Oh no-he was 'too busy'-again.  So the buyer, buyer agent, seller and myself are sitting around for an hour in the lobby til Mr Friend of the Family Attorney strolls in at 1050a.  So sorry he was late, he had 'important meetings' to attend to.  Oh-so we're NOT important?  Thanks.

We finally sit down to close at 1130a.  My seller is already steaming out of his ears because he needs to get back to work.  He hands over his docs, signs the HUD-but there's no 1099 for him to fill out.  You know, the 'yes, we have no bananas' double negative question form. I ask the attorney where it is-he claims he's NEVER HEARD OF SUCH A FORM.  And looks at me like I have grown three additional heads in his office.  I explain that he needs it for his files since he's not going to report this sale to the IRS, as my seller did indeed live in the house two out of the past five years.  He says that he can 'make up' a document if it will make me happy.  So I excuse myself, and call the attorney with whom I do a LOT of closings to verify what I need to get out of this guy.  My Professional Full Time Real Estate Attorney says that we're probably better off having a CPA certify it, than a made up form by this guy.  So my seller and I leave.

My seller says:  'This guy must not handle any real estate, you do a HELL of a lot more closings than he does.' 

So sellers and buyers-if your friend or family is a full time professional real estate attorney, then we can talk about using them.  But if it's a favor?  Do yourself a favor and use someone who specializes.  All doctors go to med school but you sure wouldn't see a proctologist for strep throat, now would you?

Comments (50)

Melissa Kruse
Gryphon - Lewis Center, OH
It was insane. Phone/fax was always busy. I mean, haven't people ever heard of e-fax? We and the lender ended up scanning in the documents and emailing them. On the plus side, it made me appreciate having an outside vendor for faxes. Never have to worry about a busy signal.
Dec 14, 2006 12:09 PM
Leigh Brown
Leigh Brown & Associates, RE/MAX Executive - Charlotte, NC
CEO, Dream Maker - Charlotte, NC
I'm impressed they had email...that sounds like the kind of operation where they'd have dialup if anything!
Dec 14, 2006 12:19 PM
Robert Hammerstein -
Christie's International Real Estate - Hillsdale, NJ
Bergen County NJ Real Estate

Leigh,

 

Your story resonates a very familiar chord for us this year.  Our daughter is a Real Estate paralegal and although we try to get the Attorney she works for some clients, it's more important to us to have someone on the inside.  We just haven't found the right dialogue to teach our Buyers and Sellers how important it is to have the Attorney that does have time for you.  We are currently in Attorney Review on a Condo for TWO WEEKS.  Everytime either I or our Buyer calls "HIS" Attorney, the secretary says he's on an important call and can't be disturbed.  Sound familiar?  I told the Buyer, he can change Attorneys if he's not happy but for some odd reason he's insisting on using him.  I would like to post a blog about this delicate issue.  I think it's more important than most unsuspecting Buyers and Sellers know!  Thanks for the blog!

 

Lisa

Dec 14, 2006 12:58 PM
Stefan Scholl
Buyer's Broker of Northern Michigan, LLC - Petoskey, MI
Northern Michigan Real Estate

Ahhhhhhhhh, an attorney closing state.........sounds like nirvana!  Actually, I had to catch myself as I thought your post was about Realtors.  "So your friend/cousin/uncle is a Realtor, eh?"

Sorry you were given such a hard time.  Maybe I should move to NC.  Is your market any better than Michigan right now?

Dec 14, 2006 01:23 PM
Kaushik Sirkar
Call Realty, Inc. - Chandler, AZ
I have never had an attorney involved in a closing, whether it be while I represented a client or if it was one of my own properties being purchased or sold.  If I recall, the practice of using attorneys for real estate transaction representation was primarily an east coast tradition/rule.  Can someone refresh my memory as to which states permit/allow this?  Thanks,
Dec 14, 2006 01:45 PM
joanne Douglas
Terrie O'Connor Realtors - Ridgewood, NJ
NJ (northern) uses attorneys to close and many specialize in Real Estate; I have had only one deal where the attorney wasn't a Real Estate expert but he was efficient and we had no problems.  Guess he wasn't doing a +$100 favor!!
Dec 14, 2006 02:13 PM
Angus in Naperville IL
RE/MAX of Naperville - Naperville, IL

Leigh, we use attorney's on 99% of our transactions. Most of the time it's with Real Estate attorney's and everything is fine. In fact it can make our lives easier as agents because there is less that we need to do.

But when the family attorney or friend gets involved...look out! They can take a simple transaction and tie meaningless knots into it, creating strife that is completely unnecessary. Sometimes costing their clients a bundle.

Dec 14, 2006 02:54 PM
Randy L. Prothero
eXp Realty - Hollister, MO
Missouri REALTOR, (808) 384-5645
Attorneys, Realtors, plumbers, doctors; what ever the service use a professional always!  Life is just too short.
Dec 14, 2006 05:56 PM
Leigh Brown
Leigh Brown & Associates, RE/MAX Executive - Charlotte, NC
CEO, Dream Maker - Charlotte, NC

Lisa-we LOVE having an inside track with a paralegal-talk about an easy transaction!

Stefan-call or email me.  Our market is strong and we have just about every builder in the world here since land is relatively inexpensive and buyers are still buying. I can help you!

Kaushik-i can answer for NC and SC-and I know that in NY it's a nightmare with three attorneys for closings (we get delayed quite often on NY domino deals because they get delayed all the time)

Joanne and Angus-glad to know you can feel my pain!

Randy-define professional....that could be a post in and of itself!

Dec 14, 2006 10:12 PM
William Collins
ERA Queen City Realty - Scotch Plains, NJ
Property and Asset Management
Leigh, Thanks for the post. How many times do you hear about the friend or family member, who is an attorney, loan officer or unofficial home inspector. In my 23 years, all of these encounters detracted the process. In the end the consumer was under represented or overcharged.
Dec 15, 2006 12:05 AM
Leigh Brown
Leigh Brown & Associates, RE/MAX Executive - Charlotte, NC
CEO, Dream Maker - Charlotte, NC
You're right, William!  I only have 6 years-and my dad has 28 years-and every single time it winds up hurting the buyer or seller who wants to have their friend help out...maybe one day folks might heed our warnings?
Dec 15, 2006 12:31 AM
Joe Sampson
Exit Realty Experts - Saint Augustine, FL
Makes me QUITE happy that we don't have to do attorney closings in the great state of Florida. I'm glad you got it worked out and still came out of it as a professional in your seller's eyes.
Dec 15, 2006 12:38 AM
Leigh Brown
Leigh Brown & Associates, RE/MAX Executive - Charlotte, NC
CEO, Dream Maker - Charlotte, NC
Joe-my title company stories are worse...since they don't do much here in NC.  I just wish there were a way to force a specialist on buyers.  But alas. =)
Dec 15, 2006 12:58 AM
Carl Guild
Carl Guild & Associates - East Hampton, CT
Central Connecticut Real Estate
I have found the best attorneys - Scheduled closings that actually take place on-time. I know about them a week in advance. A good real estate attorney is worth his weight in gold! Thanks for the story. It is bookmarked for th enext client who wants to use a "friend of the family"
Dec 15, 2006 03:24 AM
Leigh Brown
Leigh Brown & Associates, RE/MAX Executive - Charlotte, NC
CEO, Dream Maker - Charlotte, NC
My pleasure, Carl.  Hopefully your folks will listen to you and save themselves the $$ and heartache!
Dec 15, 2006 03:54 AM
Elaine Reese, REALTOR® in central Ohio
Real Living HER, Powell Ohio - Powell, OH

Just as has been said over & over again here, I've never had a good inspection from "Uncle Charlie" nor has the buyer ever saved closing costs on "Cousin Lender Larry". One buyer paid almost double in closing costs from his own brother! And we almost didn't close because the brother didn't due his paperwork correctly. And I always shudder when they want their handyman relative to do the inspection. He arrives with his flashlight and ladder. UGH! 

Fortunately, we close at title companies - that are selected by the seller, but usually recommended by us. That definitely helps eliminate some of the issues mentioned here. Attorneys seldom attend unless there is something out-of-the-ordinary that requires their special services for their client.

Dec 15, 2006 06:13 AM
Leigh Brown
Leigh Brown & Associates, RE/MAX Executive - Charlotte, NC
CEO, Dream Maker - Charlotte, NC

Don-unless it's us, right? =) of course, i have referred out some family and friends to keep that business side out of our personal stuff.

Elaine-i'm going to get in trouble with my good attorney friends-I love my attorneys-the ones i know and trust, our closings are usually short and sweet and inexpensive for buyers and sellers.  This one was just not a real estate attorney. =)

Dec 15, 2006 06:27 AM
Ki Gray
Austin, TX
Austin Real Estate

Good post.  With everything that can go wrong with a closing I dont see why people allow friends that dont have experience to get involved.  In Texas we dont have attorney at the closing but use a closing agent.  All they do is closings all week long.   We almost purchased a property where the seller was an attorney and not a real estate agent.  We backed out partially because they were difficult to deal with because they didnt understand the standard methods for moving through a real estate transaction.

Dec 15, 2006 12:25 PM
John Klassen
M & T Bank - Kingston, NY

You should post this in the War Stories Group. No matter how many times we tell them...they still won't listen.

 

Great post, nightmare story.

Dec 16, 2006 04:58 AM
Bradley Cohen
Keller Williams Concord/Kannapolis Market Center - Concord, NC
ABR,GRI

I understand your pain.  I have never had a situation with an attorney. However, I have had many clients want to use their friend who is a lender and that has been a total mess if you know what I mean.  The worst was when the lender was out of state.  He kept assuring me the closing would close on time.  We ended up closing almost 2 weeks late.  This was a great story.  Hopefully agents who have not had this problem will strongly suggest to their clients use a professional if this situation comes up.

Thanks

Jul 01, 2007 05:55 AM