People feel they wasted their money on a full attorney review because they can’t retain it and still want the agent to define sections as they come up. So if they do a full attorney review before they are actually “in contract”, they still need the agent to explain the relevant portions of the clauses. Usually the inspection clause.

I think a great class would be an attorney doing a full review for agents. I’d go to that class. So that the agents are explaining it as correctly as possible to the clients.

I’d love a class on just P&S, 22A, 22D, 22J, 35, 35R and maybe a few others,like house sale contingency. In fact I’d require our agents to attend as well. All addendums would be too much to retain. I think a class like that every 6 months for refresher would be very valuable for agents. Those forms are used most often. I can probably come up with a better complete list.

Jillayne? You game?

Hourly rates for real estate lawyers are across the board. I think it probably ranges from high 100’s to low 300’s.

While I don’t do a lot of residential transactions these days, in the past I would usually quote the client 2-4 hours of time for document review, consultation and drafting an addendum which is many times recommended. I believe some attorneys (Craig I think) will do this work on a flat fee. He can chime in if he wishes.

Does that help?

Russ

This “practice of law” issue continues to be one of the most misunderstood issues on RCG. You, Marlow, have a license to practice law in real estate transactions. That license is just “limited” based on the factors in Heritage House. Does the explanation of contract rights and obligations constitute the practice of law? Yep. Do I think that an agent’s explanation of a PSA that they prepare for their client is within this limited license? Yes, I do.

A lawyer who takes agents to task for doing so is, I believe, misguided. The whole idea behind the decision in Heritage House was to remove lawyers from simple residential real estate transactions. While not specifically stated, I don’t believe the Court came to that conclusion while at the same time not allowing the agent to explain the docs to the client. Certainly, if the agent is filling in the document, they should know what the docs say and mean. Right?

-Russ

I agree that agents need to go through the entire contract with some buyers and sellers. But if explaining to them the contract constitutes “practicing law”, then it would be very foolish of us NOT to insert that clause.

You say: “You absolutely, positively cannot discuss a PSA without discussing the consequences of the words. And you cannot, in my opinion, properly represent a client in a RE transaction if you don’t explain what the heck they are signing”

But then some other lawyers take us to task for doing just that, complaining we are practicing law without a license.

I re-read your post and my own question was answered.

I agree with you, based on what I hear in the classroom from agents.
Everything appears all well and good, provided there are no conflicts.

It gives the consumer an APPEARANCE of “good.”

Once the deal falls apart (in whatever way) the agent and the consumer come out on the short end.

Referring to an attorney not only helps the consumer, it also serves the agent as well.

Maybe consumsers don’t understand that an attorney review is not so terribly expensive but is more like a home inspection: A worthwhile investment. Russ, what’s a common hourly rate for an attorney review of a Purchase and Sales Agreement? Is there a range? Follow up question: how long does it take, on average, for a competent attorney to review a P&S?

If it’s not cool to ask that question, just let me know.

Marlow,

I have something to add, but I need to jet. Be back in a couple of hours.

First, I’m OK with your goal. It does work in many cases.

Here’s the rub. That damn disclaimer. Agents prepare the PSA (filling in blanks and maybe writing stuff) and they insert the “company addendum” with many self-serving clauses like the one above. That clause essentially means that the agent who has written up the deal has (1) not told their seller or buyer client what in the heck all of the mumbo jumbo means and (2) even if they have told them, the client is not supposed to “rely” on it (meaning, don’t trust what the agent says cuz they are not a lawyer). Hmmmm.

You absolutely, positively cannot discuss a PSA without discussing the consequences of the words. And you cannot, in my opinion, properly represent a client in a RE transaction if you don’t explain what the heck they are signing. My issue is not that agents want to be the “lawyers” in the transaction. As I have said many times, that fits how we do business out here. My issue is really that the agents (and their companies) want their cake and frosting too. They want to BE the lawyers but they don’t want the responsibility of BEING the lawyer (hence the disclaimer). I find this wrong.

-Russ

That contradicts my experience here in Washington State. I can’t say we NEVER consult lawyers but, in 20+ years in real estate sales, I’ve never had a client who took their contract to an attorney for review, prior to signing. And once the contract IS signed, it’s signed. It can’t go back to an attorney to be renegotiated unless both parties agreed to do that or one party wanted to try to wiggle out of it.

Our standard MLS forms do not advise clients to seek the advice of the attorney, but my company does have an addendum that suggests that they do. “Buyer and Seller acknowledge that they have not received or relied on any statements or representations by agent regarding the legal consequences of this Agreement. Buyer and Seller are advised to seek independant legal counsel regarding this Agreement.” So, clients have the option to see an attorney, but rarely do.

I think that ticks some lawyers off, but it seems to work ok. And yes, I work for a major firm here and yes, I believe my experience is fairly typical. Also, in this state, we order title and if there’s a cloud, we can get assistance from the LPO’s or their staff attorney. And we don’t need lawyers to close transactions either, we use escrow companies.

So, in Washington, it’s entirely possible to go your entire real estate career, and never see a lawyer.

And that is our goal

David up there has the right approach

In Chicago, we’re paid to sniff out the property for clients, get them in front of property, advise on the actual product/investment, have a team of referral services such as contractors, movers, designers etc… that we work with every day. We put the team together that finds, researches, improves, and closes the property… whatever they need and whenever they need it. So, of course we talk to attorneys, developers (which some of us are), contractors, mortgage brokers… and we should have a clue to solve problems, or, at least know a problem could happen, and like David says, find someone to solve it. My attorney, brokergae and I put our heads together all the time to find a solution… and not freak people of the place they want over plants or fixtures.

Oh yeah, we market and SELL real estate. Sales does not have to be equated with your picture of low professionalism in the “industry”. Go into any industry, you’ll find the same people. So, Golly Gee yourself crazy and save the lecture on professionalism. People know it when they see it and it’s different to everyone!

It takes a lot of experience to KNOW what should go in an addendum, then write it. Here, we write the addendum to the best of our abilities as agents to indicate what has been negotiated and agreed to on the “ground”. It goes to attorney to get tightened up. No one gets out of our attorney review without a second round of agreements and understanding in writng and signed off.

Addendums concerning exclusions and personal property are a matter of training and experience… there are clear guidelines to personal property and attached items stated in our statutes.

For example, if I’m listing a property and we exclude “attached” personal property such as chandeliers, attached shelving and lighting fixtures, we list it as excluded. The buyer can jump in a lake. The buyer’s agent will need to negotiate credits, replacements, repaired walls etc…if they want it done.

The best scenario is to either list, or ask about, specific exclusions depending on the side your on. Then, negotiate the appropriate purchase price or a credit in light of the personal property or repair issues. Asking the seller to fix or replace things in a deal is a joke…if they wanted to do it, they would have done it already (as Ardell suggests… take the damn thing down before showing, or sell it with the house).

If either side balks… guess what? No deal.

Bottom line, I ask my clients to pay the $500-$600 for a real estate attorney I reccomend or to hire one they know. Their contract riders are extensive and detailed…they check title… plus they do important administrative work. If my client wants to “go it alone” just to save the money, I won’t work with them..unless they are a real estate attorney themselves Best money spent every time.