Frankly, it never occurred to me that buyers may be well advised to ignore their broker representative’s recommendations for a real estate attorney.
The issue arose recently at a dinner following an estraordinarily stimulating social media event called RE BarCamp, sponsored by Lucky Strikers Social Media Club (LSSMC) for real estate and allied professionals.
Matt and Susan Daimler, the brains behind Buyfolio and the founders of SeatGuru.com, told those of us nearby an anecdote in which it appeared a buyer’s attorney was not up to snuff.
Did the broker recommend that attorney to ensure smooth sailing in the transfer of real estate or was it a mere coincidence that a costly oversight transpired?
Whatever the answer, I came to see how real estate brokers representing buyers especially possess an inherent conflict of interest, or its appearance at minimum, in suggesting lawyers to their clients and customers. If a lawyer can be counted on to take a slipshod approach to his fiduciary responsibilities, lacking obligatory thoroughness and assuring contractural safeguards for his clients, then the brokers’ commission is all but assured.
On the other hand, a lawyer who is both conscientious and competent may discover someting in, say, an offering plan or the seller’s draft contract that will delay or even thwart the property sale.
So runs the argument against trusting brokers to make those referrals (which can, in any case, result in a free lunch or dinner from the lawyers, if not something more valuable).
Yet I am inclined to continue making referrals. Not only do recommend those lawyers who have demonstrated their value to my previous clients, but their integrity and commitment to protecting buyers’ best interest is evident to me.
I’d love to know where my readers on this issue.
Tomorrow: Weekly Roundup
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022