What should the buyer’s lawyer be doing?
This came from a Linked In questioner who was obviously hacked off (I changed the wording a little to protect her privacy).
Here’s my answer:
Communication in a real estate transaction in New York City (where I am licensed) involves multiple parties — often a buyer’s agent, a seller’s agent, and a buyer’s and seller’s lawyer.
Agency and fiduciary duties are different. The buyer’s lawyer is an agent and a fiduciary of the buyer. The buyer’s agent is a fiduciary of both buyer and seller, but an agent of the seller.
This generally creates a situation where the buyer’s agent is suspicious of the buyer’s attorney. The buyer’s agent might think the buyer’s attorney isn’t detail-oriented enough, and doesn’t work hard enough — “just a paper pusher.”
It also generally creates a situation where the buyer’s attorney is suspicious of the buyer’s agent. The buyer’s attorney might think the buyer’s agent — with her ultimate allegiance to closing the deal at almost any cost — is, oh “a slimy weasel.”
In reality, as the buyer, what you need to do is to inform BOTH members of your team what you want at all times. This actually has a way of working out.
Let’s see how this works in practice. Let’s say the contract is being negotiated, and the buyer wants something put in the contract, which is being drawn up by the seller.
1) Buyer calls both her agent and her attorney, and says, “I want the dining room chandelier.”
2) Buyer’s attorney calls seller’s attorney, and is allowed to operate with latitude to achieve buyer’s end. So the buyer’s attorney says, however his/her style works, “hey, we want the chandelier in the contract.”
3) Seller’s attorney agrees.
4) Seller’s attorney forgets to tell his paralegal.
5) Contract is issued from seller, without clause that buyer wants.
6) Meanwhile, buyer’s agent gets her credit card bill, and decides to get religion and do some work. Buyer’s agent calls seller’s agent, says, “hey, where’s our contract, have you sent it yet? Is your seller okay with throwing in the chandelier?”
7) Seller’s agent calls seller’s attorney (seller’s agent first needs permission from seller to speak directly with the attorney, but will usually get it) and says “did the contract go over? Did you put the chandelier clause in?”
Seller’s attorney strikes forehead with palm of hand.
9) Seller’s attorney calls buyer’s attorney, asks him to write in chandelier.
10) Contract is presented to buyer for signing. Buyer sees that change on chandelier has been handwritten in, and is not initialed by seller’s side. Buyer wonders why she is spending (FILL IN AMOUNT HERE _____ dollars) to work with a team of idiots. Swears never to move again.
11) Buyer calls her team on the carpet; asks questions about apartment-buying process on LinkedIn.
12) Buyer’s attorney kisses buyer’s butt, calms her down, gets her to sign contract.
13) Buyer’s attorney sends signed contract goes back to seller’s attorney, explains buyer was temperamental about chandelier. Seller’s attorney has seller initial chandelier change, everything works out fine.
I know that this was the long way around the bases, dear readers, but I hope it made you laugh, and I hope it drove home the point that it’s the strength of your team that will ensure a successful closing.