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Buyer Tips | Know Your Rights - Select Your OWN Attorney

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Real Estate Agent with Savvy + Company (704) 491-3310 228209

Buyer Tips | Know Your Rights - Select Your OWN Attorney

 

Choose your own Charlotte real estate attorneyI’d be willing to bet there are 250 real estate attorneys here in town!  Ask 250 agents who their preferred real estate attorney is and you’ll likely get at least 200 different answers!

 

From the onset of agents handling short sales in our area, there are consistently, the handful who INSIST that the buyers use the seller’s attorney.  I’m not going to debate the RESPA issues with that but, I am going to share what recently happened to a client of mine who was purchasing a luxury short sale.  

 

After much ado about my buyers selecting their own attorney, we finally ignored the tenacious agent’s demands that we "ARE REQUIRED TO use the seller's attorney" and pursued our clients’ choice of Closing attorneys.  Upon final approval of both the first and second liens on the property, the Buyers’ attorney performed the Title search, only to discover that there was a THIRD lien on the home that was completely overlooked by the Seller’s attorney.

 

Delay after delay had been endured by these buyers but, during the conversations of the discovery of that third lien, the listing agent found that the SELLER was aware of this and assumed that this lien had been discovered by his attorney!

 

As it happened, we were able to get the lovely home Closed but, what a close call!  Had our buyers used the seller’s attorney, they would have inherited quite a substantial lien on the property.  When would they have discovered this?  

 

  • Possibly weeks or months after Closing with someone knocking on the door, letting the buyer/homeowner know that the home is now in foreclosure.
  • Could have been a year or two down the road when the buyer/homeowner were refinancing.
  • Or, it could have been when they decided to sell their home.

 

Imagine the shock and horror of finding out that you used someone else’s attorney who made a CRITICAL oversight when buying your home - regardless of the price you’re paying - that YOU are now responsible for.  You cannot sell this property until this lien is satisfied!

 

It pays DIVIDENDS to hire your OWN attorney for the job (or Title Company, depending upon the state that the property is in)!  

 

© Debe Maxwell | The Maxwell House Group | SavvyBroker@me.com | Buyer Tips | Know Your Rights - Select Your OWN Attorney

Comments (12)

William Johnson
Retired - La Jolla, CA
Retired

Hi Debe, This is excellent advise and should be taken literally by Buyers to have their own professional counsel. Glad you and the Buyers saved this but it sounds like it could have come close to possible  litigation had the Buyers discvovered the lien after the fact. I wonder if the title insurance would have covered the negligence?

Dec 05, 2013 02:40 PM
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

Debe,

I can't put my finger on it, but it always seems a little shady to me when one party suggests that the other party have to use a specific service provider. And yes, I consider attorneys nothing more than service providers in a real estate transaction.

Rich

Dec 05, 2013 05:01 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Debe, great post.  When it comes to short sales and foreclosures, I always recommmend that buyers have their own representation.  I may well save them lots of money and aggravation.

Dec 05, 2013 08:02 PM
Rob Thomas
Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954 - Bristol, TN
Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro

Debe ...This is some of the best advice any buyer can receive! Some just walk into it thinking they have to use whoever they want them too.

Have a great day in NC!

Dec 05, 2013 08:28 PM
Beth and Richard Witt
New York, NY
The best Retired Brokers !!!!

For sure each state has different laws but I have never heard of this one... Using the seller's attorney sound like an insane thing to do... Great that you bring it to the buyers attention

Dec 05, 2013 08:36 PM
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Debe I had buyers with the same issue.  We had our own settlement company run the title search and the third lien was discovered.  The sellers agent was unaware.  I ended up coming up with the solution for the sellers to get the deal closed.  If a buyers agent suggests a title company I've never heard of or had a bad experience with I will recommend to  my clients we use a different attorney for peace of mind.

Dec 05, 2013 09:24 PM
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Debe - It's always fascinating to me to see how other markets work around the country. I have had two or three clients EVER who had an attorney involved in the transaction, and one of them has been responsible for bringing us over $15 million in sales since 2006. They simply aren't used in Texas very often.

Thanks for your kind "welcome back" comment earlier.  :)

Dec 06, 2013 03:12 AM
Tony Busanich
TD Bank - Freehold, NJ
1-4 FAMILY HOME LOAN SPECIALIST

Hi Debe, great post, i agree with your post, the attorney can only help in the transaction.

Dec 06, 2013 03:43 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Debe I am a Loan Originator, and he Lender I work for would never allow the Sellers Attorney to represent a Borrower we are doing the loan for.  That is a conflict and trouble waiting to happen.

Dec 06, 2013 10:51 AM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Debe this example shows the importance of a buyer's attorney.   In this case if the buyer had  used the seller's attorney he or she might have been stuck with a house with a lien.  Great tip.

Dec 06, 2013 02:38 PM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Debe-Both parties using the same attorney is similar to both parties using the same REALTOR. Always a bigger chance of someone getting hosed if the principals use the same person. I'm not suggesting this is intentional either.

Dec 31, 2013 12:13 AM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

WOW!  I really fell down on the job on this post - it was obviously a post-'n-dash!  Sorry for the tardy response!

William - They may have but, honestly, the onus is on the attorney here in our attorney state.  I'm sure their E&O would have covered it but, still, imagine the horror of the sellers/now-owners when they found out about this lien - delaying re-finance at a particular interest rate, selling their home in a timely fashion, etc.  Just not a good scenario any way you look at it!

Rich - You're absolutely right - they are service providers!

Gabe - Exactly!  You're smart to do that too!

Rob - Thank you so much and thanks for stopping by this NC blog too!

Rich & Beth - I believe some short sale agents push for THEIR Title companies to be used in non-attorney states.  I don't see that as fair to the buyers in those states either!

Cindy - Smart girl - thankfully I had the forethought to do that as well!  My clients were super generous throughout this entire transaction and I honestly believe had they been the ones to make the decision without talking to me first, they'd have just gone with the sellers' attorney!  

Thanks, Jason - SO glad you're back!  And, you guys must use Title companies - same difference as far as short sale agents insisting upon using the Sellers' Title companies.

Tony - Yes, as long as it's their OWN attorney!

George - It amazes me the number of agents that #1 insist that the buyers use their attorney and #2 the buyers' agent doesn't rebel!

Jennifer - Thank you!  I agree - It upsets my stomach to think what COULD have happened!!

Wayne - EXCELLENT point!  I couldn't agree more!

Happy New Year Everyone!

Jan 02, 2014 10:02 AM