THE IMPORTANCE OF COUNSEL IF YOU'RE NOT USING A REALTOR

Hey, I get it – in today’s economic climate, I’m as much in favor of trying to save a buck as the next guy… There’s a difference, however, between trying to save a buck and jeopardizing your interests. At least in the Western New York region, the real estate market is presently pretty gosh darn hot. In an effort to save that proverbial dime, I’ve noticed that many buyers and sellers are navigating the market without the assistance of a realtor, all in an effort to keep costs down. I’m not here today to debate the sageness of buying or selling a home without the benefit of a good realtor – regardless of whatever I might say, there will always be those who simply undertake to do it themselves. That being the case, I offer the following to those brave souls determined to purchase or conduct a For Sale By Owner (FSBO) on their own.

Is it impossible to conduct a real estate transaction without the benefit of a realtor? Hardly, but buyers and sellers need to understand that realtors bring many unique characteristics to the table that benefit their clients, not the least of which include their experience in negotiating and their familiarity with the necessary contractual documents. When you remove realtors from the equation, buyers and sellers alike are eliminating a font of professional experience from the process that likely needs to be filled in order to bring the deal to fruition. The question becomes one of who will fill that void to ensure your interests are truly protected?

For the sake of this discussion, I’m setting aside the issue of your negotiating prowess. If you’re doing it on your own, hopefully you’ve at least educated yourself on the market and your area comparables so you have some sense of the deal your making. My fingers are crossed for you that you aren’t getting robbed, regardless of which side of the table you’re sitting. My real concern today relates to the dangers of undertaking real estate contracts on your own.

Unless you’re an experienced real estate investor who routinely flip houses, it’s unlikely that you have the knowledge and requisite understanding of real estate law to prepare a purchase offer agreement, a counteroffer or the associated addendums that almost always accompany such offers. Here’s the danger, and I believe it’s very real. Unless a real estate contract has been prepared and executed properly, you could well be setting yourself up for disaster, either in terms of having drafted an unenforceable contract, having prepared an incomplete contract that doesn’t fully set forth your intentions, or exposing yourself to liability down the line if you failed to disclose something you should have. None are pleasant thoughts, and all will almost certainly cause you to have a very bad day if brought to light or used against you.

No one wants to go through the purchase and sale process only to later find that the deal you were so intent on can’t or won’t be closed for some reason that was entirely within your control from the very beginning. Rather than risk that potential, the solution is simple. In order to close, you’re going to need counsel in the first instance to review and approve whatever contract you execute. If you’ve chosen not to use a realtor, do the smart thing and engage your attorney to prepare the necessary purchase offer or counterproposal too! If your attorney routinely practices real estate law, he or she is intimately versed with these contracts and will be happy to assist you at usually nothing more than a nominal fee over and above their usual closing cost. Yes, it might be slightly more expensive than doing it yourself, but I can guarantee you that it will certainly be less expensive than using a realtor or the costs associated with the litigation that could ensue from a poorly, inarticulately or incorrectly drafted contract.

Are there guarantees in life that your deal won’t fall through even with a perfectly drafted contract? Certainly not, but using counsel at least ensures that you’ve done all you can to protect those interests to the best of your ability. As the old saying goes, don’t be penny wise and pound foolish. Save money where and if you can, but not at your own expense!