Atty/Broker Conflict of Interest
I am selling my condo and hope to close on an offer that just came in. My broker recommended a particular RE lawyer to do the contract of sale and closing. Does anyone foresee a problem using a real estate attorney who came recommended by our broker? Any possible conflict of interest in this scenario?…
I am selling my condo and hope to close on an offer that just came in. My broker recommended a particular RE lawyer to do the contract of sale and closing. Does anyone foresee a problem using a real estate attorney who came recommended by our broker? Any possible conflict of interest in this scenario? any reason why the lawyer might not have our best interests at heart?
That is illogical – the lawyer has no incentive to cater to the interests of the broker over his/her client. There is nothing to be gained, financially or otherwise.
Its easy to make generalizations and snap comments, like “money talks”, but without any substative basis for doing so, they mean nothing.
Just watch out for the Jewish holy days if you’re planning a closing!!!!
“The lawyer represents you and not the broker.”
But why should you ever hire a lawyer who has an actual incentive not to represent you as strongly as you might wish? What possible reason would you have for hiring somebody even with even a potential conflict of interest? Why should you be an idiot? There’s no shortage lawyers capably handling real estate in Brooklyn.
No hard feelings, brokers and lawyers, but money, and the opportunity to make it, talks. Folks, don’t let somebody else’s money be talking to your lawyer.
No need to knock my opinion – I have much more experience than you might assume. To me, there is no grey area here – either you do the right thing or you don’t.
A simple letter to the Bar is all that is needed – very easy and a real pain to the lawyer thereafter.
If the lawyer is experienced and has done a lot of closings in a particualr neighborhood, then he’s going to know most brokers, etc. – its just a fact.
I undesratnd – that’s not a conflict, that’s just being a bad lawyer.
I am a broker and an lawyer. There is no conflict of interest. The lawyer represents you and not the broker. A lawyer would not jeopardize their license for a fee of anywhere between $2K-3500. I would ask for more than one recommendation and ask friends who have had closings in the same neighborhood. It may sound strange but real estate can be very local and you would want an attorney familiar with the area because they will then be more knowledgeable about the deal you are getting.
“There is no gray area – either the lawyer acts in the best interests of his/her client or he/she doesn’t.”
There’s always a gray area — if you don’t think so, you haven’t much experince with the world. Moreover, I don’t think anybody wants to go from a souring real-estate purchase into a complaint process against their prior lawyer. That’s doubling the no fun — unless you really love being a litigant (and are thus clinically demented).
The trick is to avoid trouble in the first place by hiring somebody who’s got no incentive to make a wrong decision or give wrong advice because of his/her loyalty to the broker. Easy enough to do. Get a recommendation from a friend. Or even from a different broker! Make sure the person is experienced in deals involving your kind of property. But get somebody who is totally independent of all parties in your deal.
I note that it is the brokers above who really like having their lawyers chosen. Hmm, wonder why that is? (I agree, of course, that it will make absolutely no difference, not even a theoretical difference, in 75-95% of cases, but you don’t want to test the theory out if by chance you fall into one of the remaining cases, where it might make a difference, do you?)
I meant gray area as in difficult to detect. If you hire the broker-recommended lawyer and something that seems fishy arises and the lawyer downplays it in discussion with you, how are you to tell whether that is the lawyer’s candid and loyal advice or whether the lawyer is shading it out of dual loyalty. Most people like to trust their lawyers (if no one else’s) and in these circumstances it would be hard to tell. I think that the shading is unethical if due to a divided loyalty, but if the lawyer’s statement is true enough but the tone or emphasis is off and might give more comfort than is warranted, it will be hard to establish the violation. There are certainly times reasonable lawyers could differ in their advice while all being competent and loyal, and I am concerned that it is within that play in the joints that a conflicted lawyer could operate.
There is no gray area – either the lawyer acts in the best interests of his/her client or he/she doesn’t. If the lawyer acts improperly, make a complaint to the Bar – this is, by far, much more of a pain to deal with for an attorney than the money to be earned from a closing. Just like any profession, there are some bad apples, but by and large you shouldn’t dismiss a recommendation just because of that. Don’t blindly accept a recommendation – talk to the attorney, see if call you back promptly, undertake some due diligence before retaining the atty.