Is Your Real Estate Agent Acting Only in Your Best Interest?

Is Your Real Estate Agent Acting Only in Your Best Interest?

Many people will not seek the help of an attorney until they really need one. Closing real estate transactions is one of those times. If you don’t already have an attorney, real estate agents will often make recommendations. But if your realtor urges you to use only one specific closing attorney, this may not be in your best interest. This article answers the question, "Is your real estate agent acting in your best interest?" If you’re thinking of purchasing or selling a home, this article will help you understand how to ensure that your realtor has your best interests at heart when recommending legal counsel.

Recommending One Attorney Can be Problematic

Let's say you’re ready to close on a new home and your realtor encourages you to use a specific attorney, rather than offering you several to choose from. Although most realtors are well meaning, others may not be putting your best interests as their top priority.

Lack of Comparison and Missed Opportunities

When you automatically use the one recommended lawyer, you are unable to:

• Weigh the pros and cons of different attorneys

• Compare fee structures

• Find an attorney with a compatible communication style

• Hire the most experienced real estate attorney for your needs

• Read and compare reviews of multiple attorneys to help make decisions

It Didn’t Used to Be this Way

For decades it was common practice to have realtors recommend multiple attorneys to clients for their consideration. But in recent times, it has become apparent that some real estate agents have been encouraging their clients to use their recommended attorney—an approach that poses disadvantages to client. Providing clients with multiple attorney recommendations allows the client to do their own research and select the attorney that best suits their needs, personal preferences, and budget.

Why Some Realtors May Not Recommend Multiple Attorneys

Here are a few scenarios that may be the reason why your real estate agent urges you to use one specific attorney. The following scenarios are totally legal, but lean towards unethical:

• The Attorney is Offering Incentives to the Realtor – Although the practice of attorneys offering undisclosed incentives to the real estate agency is totally unethical, it happens. The agent may have a vested interest in you using one attorney because of a kickback arrangement otherwise known as a referral fee.

• The Attorney and the Realtor ‘Buddies’ – When a real estate agent has some sort of long-standing friendship with the recommended attorney or is possibly related to them in some way, this could hinder the attorney’s ability to be objective and offer unbiased legal advice to the client – especially when there’s an issue and it’s in the client’s best interest for an impartial attorney to advocate for them.

• Your Realtor More Interested in a Swift Closing – Realtors receive their commissions when the real estate deal closes. Some realtors may recommend a specific attorney because of their reputation for closing quickly, rather than taking the time to meticulously review contracts and mitigating potential issues that may arise. 

A Good Real Estate Agent Should:

• Offer Multiple Attorney Recommendations – A good realtor will guide their client through the buying and selling process but ultimately let them choose their own attorney that best suits their needs. The realtor should encourage that they to their own research, check reviews, interview potential attorneys, and consider their own preferences. 

• Be Totally Transparent – If a real estate agent has an arrangement with a specific attorney and is upfront about their relationship, they should inform their client in writing and have them sign the document stating so. This would ensure a more transparent and beneficial experience for everyone involved. 

Why Realtors Benefit from Recommending Multiple Attorneys

Real estate agents can also benefit from providing multiple recommendations for closing attorneys in several ways.

• They’re Not Held Accountable if Legal Issues Arise – When real estate agents consistently send their clients to one attorney without offering them multiple options, and something goes wrong due to legal missteps, who will the client blame? If the client suffered financially or legally in some way, it’s unlikely that the client will refer their real estate agent to others. If the agent offers multiple attorney names, the agent cannot be held accountable since their client chose their own attorney.

  
  

• They Gain Respect from Attorneys – Another reason why it’s in the best interest for realtors to recommend multiple attorneys to their clients is because if the agent consistently suggests just one attorney to their clients on a consistent basis, it’s not going to sit well with other real estate attorneys. If a particular realtor becomes known for doing this type of practice, it’s highly unlikely that they’ll get recommended by the attorneys not having been given the opportunity to throw their hat into the ring.

Tips on How to Choose a Real Estate Attorney

Here are several suggestions on how to select a real estate attorney that’s right for you:

• Visit Attorneys’ Websites – To ensure that your closing attorney will be well-equipped to handle any potential legal pitfalls that may arise with your real estate transaction, you may want to find an attorney that has many years of experience in this area and that they are keeping up to date with local real estate laws. A good place to start is to visit their website.

• Check Reviews Online – Various online resources are available to help determine whether an attorney is suitable for real estate transactions.

  
  

• Check their reviews on their Google Business Profile – Read testimonials and reviews that appear on the attorney’s website or on review websites.

• Visit their Facebook business page for reviews and recommendations – See if they are listed with the Better Business Bureau and learn if they have a good rating or positive reviews.

• Get Referrals from Friends and Family – The old saying that there’s better than a personal referral from a trusted friend or family member still holds true. Not only can they offer names of real estate attorneys with whom they’ve had a good experience, but you’ll know that they will have your best interests at heart. Although it’s a good idea to take suggestions from people you know, you still should do your own research to find the real estate attorney that’s best for you. That way, if something goes awry, you can’t blame it on the person who referred that attorney.

• Research Professional Legal Organizations – Check to see if the real estate attorney you’re considering is a member that is in good standing with legal organizations and bar associations.

Is there an Attorney Code of Ethics?

Attorneys are often asked by their clients to recommend professional services like real estate agents or accountants. While no specific ethical rule mandates a lawyer provide multiple recommendations to their clients, lawyers have taken an oath to act with

competence and diligence ensuring that acting in the best interest of their clients is first and foremost in all interaction. This is why it’s also in the attorney’s best interest to provide multiple options for professionals for their clients.

Conclusion

If you already have a trusted attorney that has expertise in real estate law, it’s not in your best interest to allow your realtor to aggressively persuade you in using their attorney. Ronald J. Axelrod, an experienced real estate attorney in Rochester, NY, has decades of experience handling all forms of real estate law. In fact, Ron was primarily responsible for drafting the very first version of the approved real estate offer several decades ago. Please contact Ron if you have any questions about the information in this article, or if you need of a real estate attorney who will always work hard and in your best interest. Call 585.203.1020.