In the process of hiring a real estate agent? You should consider hiring an agent who is also a licensed and practicing real estate attorney. Someone who can effectively wear both hats can help assure that you are properly protected from any potential issues throughout the process. Aside from the overall peace of mind related to covering all of your bases, here are some practical considerations:
ONLY LAWYERS CAN DRAFT AND EDIT CONTRACTS OR GIVE LEGAL ADVICE
Most residential closings use a preprinted Agreement of Sale (AOS) that the buyer and seller simply initial and sign. If a real estate agent were to draft their own AOS or alter the preprinted AOS they have been provided, it would be considered an unauthorized practice of law. This limits an agent’s options if a change is desired or needed (addendums are often signed as a workaround to this issue). Sometimes alterations are hand scribbled onto the preprinted AOS, or verbal agreements are made prior to the closing. Uncertainty related to these alterations is the enemy of a good real estate attorney.
Additionally, real estate agents aren’t required to have a thorough understanding of contract law. If they were, there would be much fewer real estate agents in general. There is a reason lawyers go to law school for three years (or more) after obtaining a college degree – the law can be very complex. Contract law is no exception. That’s why many real estate brokerage offices will advise their clients to “consult an attorney” with questions about the AOS. By hiring an agent/attorney, the contract issue is solved from the outset.
Finally, potentially unexpected legal issues pop up throughout the real estate transaction process, and having an attorney on hand can be helpful. Should you structure your property ownership as a joint tenancy? A tenancy in common? To what extent are you liable for issues relating to your investment property? Should you use an LLC as the purchaser for your investment property? What happens if the deal falls through? Are you liable for the down payment? Agents aren’t allowed to give legal advice, which is another benefit of hiring an attorney/agent.
IT MIGHT NOT COST YOU ANY EXTRA MONEY
Depending on the agent/attorney, you might be able to get the benefits of hiring an attorney without having to pay any extra money. Some attorney/agents will only require their agent’s commission, and won’t require any extra funds for their legal work.
Typically in Pennsylvania, agent commissions are 6% percent of the total purchase price, with 3% going to the buyer’s agent, and 3% to the seller’s agent, all of which is paid by the seller. This means as a buyer, if you can find an attorney/agent who takes the deal strictly on commission, you can get the services of both an attorney and an agent without paying a dime (because the seller covers the 3% commission).
If you are looking to hire a real estate agent, you should consider hiring an agent/attorney. They can draft and alter contracts, guide you through complex legal issues, and they might not cost any extra money.