I was recently browsing through an in-box full of blogs and articles and came across a great article on Inman.com by Cara Ameer, a Coldwell broker-associate in Ponte Vedra Beach, Florida, 10 Reasons You Never Buy or Sell Without an Agent. Cara is right; you should absolutely use an agent when buying or selling a home. Her 10 reasons just scratch the surface. But considering that I just posted Is Your Real Estate Agent On Your Side? last week, I had to respond to Cara. Many agents, at least here in South Florida, encourage or “suggest” to their clients that there is no need to get an attorney involved in a house closing. Attorneys just muck things up. These agents say that the title company can handle every thing.
Before I give you my 5 reasons, let me tell you a story about a client, a husband and wife, I am currently helping, whose agent told them exactly that. They were purchasing a home in Coral Springs about a year ago. The inspection revealed that the roof, over 20-years old, needed to be replaced. It could not be repaired. The roof was a shingle roof. This is unusual these days as most South Florida roofs are tile. The cost of a new shingle roof would be about $7,500 and the client asked their agent and the seller’s agent if they could still put up a new shingle roof. Without hesitation, both agents assured the client that shingle was permitted and the client’s agent skillfully negotiated a $7,500 credit from the seller for a new roof.
In addition, the title company, recommended by client’s agent, did a lien and open permit search on the property. The search disclosed that when the roof was put on the house over 20-years ago, the permit was never closed. Both the client and the agent directed the title company to take the necessary steps with the seller to have the permit closed prior to closing.
Sometime after closing, the client engaged a contractor to install a new shingle roof. The contractor went to pull a permit for the new roof and was denied because 1) there was an open roof permit on the house and 2) shingle roofs are not permitted in this neighborhood in Coral Springs. Only tile roofs are allowed. The agents and the title company clearly dropped the ball. An attorney would not have. A tile roof will cost almost $30,000. Client would not have closed had they known the cost would be so high and had Seller not agreed to pay it. In this case, while agent did a fine job negotiating a roof credit, he did no due diligence to determine what was allowed in the neighborhood. Consequently, the credit was insufficient and his client, my new client, would not have purchased the house. He exasperated the problem by not assuring that the open roof permit was closed prior to closing.
My top 5 reasons to use an attorney in closings:
- An attorney always represents you first and foremost. An agent is likely a transaction broker and owes you no fiduciary obligation.
- An attorney can and will solve problems that arise during the closing process. My case above is an example. Other examples include title issues or issues with the lender. Brokers can’t deal with these issues and title companies are simply closers. They only follow instructions and won’t point out title exceptions that could be harmful to the buyer or might not be relevant and, I illustrated above, won’t always follow up. In Florida, many attorneys act as agents for title companies. But as your legal representative, attorneys actually read the documents and understand the meaning. Attorneys will work to remove exceptions that don’t apply and will work with underwriters on complicated issues.
- Where negotiations get heated, an attorney has skills to resolve problems. Agents do as well, but an attorney understands and addresses legal implications and can protect your interests. An agent can’t go this far.
- Attorneys understand and are up to date on TRID, the “Know Before you Owe” Rule. They can help you navigate loan complexities.
- Attorneys read and understand the fine print. I have to say here that I am often presented with contracts from agents that are on outdated forms. Current forms address current rules, laws and regulations such as TRID. Agents should be aware of this, but some aren’t.
These are just my top 5 reasons to use an attorney; there are many more. Don’t exclude an agent. But a good agent working with a good attorney make a great team for anyone buying or selling a house.