Should I hire a Commercial Real Estate Broker or a Real Estate Lawyer?

It’s an open secret that real estate brokers earn pretty decent perks/commissions. And while the commission is always paid by the seller, the burden might be shouldered by buyer indirectly. Real estate lawyers on the other hand charge inflated hourly rates. As an investor or home buyer, these two scenarios might make you struggle with the decision on who to hire between the two. Let us help break it down for you.

Different States have different real estate laws. A real estate broker’s input are less legal even though they can help you with talks that border the legal e.g. drawing a home purchase contract. A lawyer’s help is more legal and in some States, the law only allows the lawyer to draw the home purchase document and close the deal.

Why Hire an Attorney?

Over time, real estate transactions have become so standardized that many buyers from the same state often opt to use the same purchase contact, only just filling in a few more blanks. This means that unless one resides in the States where lawyer engagement in real estate transactions is mandatory, an ordinary transaction does not require a lawyer.

Still, the importance of a lawyer’s legal know-how in real estate transaction cannot be downplayed. This is because even though most brokers are conversant with the negotiating and contracting part of the process, they cannot make legal judgments. This is where a lawyer comes in; they help answer the legal issues neither you nor the agent may be able to answer.

Let say for example, you wish to rent a prospective new home for a year before you are obligated to buy it, or wish to evict  tenant and rent out your unit to a family member, only a lawyer can tell you if such moves are feasible. They can also help you look into contacts that have an unusual language e.g.in your mortgage.

On payment, an Attorney would charge you hourly rates ranging from $150 to $400. Others charge flat rates for specific services e.g. drawing the closing documents. Either way, you are fully in charge of the financial decision and you can choose to engage a lawyer for the number of hours you wish or only for specific tasks such as reviewing a document or answering legal questions and make sure your agreement is documented.

Why go for an Agent?

The process of buying a house is not a walk in the park. That is why many home buyers opt for agents who are only too willing to go through the tedious process on your behalf. The paperwork alone can be hectic and you sure want someone with the experience to handle such. An experienced broker will ease the entire process as most of them often have contacts of mortgage loan brokers, good inspectors and other contacts that speed up the building process main got less complex.

As a buyer, avoid the seller’s agent. You sure do not want someone representing the interests of someone else take over the process, Get one who will champion your own interests- your agent. Ultimately, you are the only one who really knows what you need in a house. So do not leave everything to your agent. You might be surprised that despite letting them in on your needs, the houses they scout for do not really meet your standards, so make a point to personally attend open houses.

Key to note is that even though you have the option of either a lawyer or a broker to ease the real estate transaction for you, you still need to learn as much as you can about the home-buying process. Knowing for example the market value of comparable homes in the area will protect you against over-zealous agents.

Real estate agents only receive their commissions (not salaries) after the search for a home has been fruitful, deal negotiated and the transaction is complete. There are however variations to the commissions. The buyer for example can decide to be the one to pay his/her broker so that the latter can be loyal to the interests of the buyer. This can also lead to drop in the sales prices. Though not a very common arrangement, some agents opt for hourly fees for less engaging tasks.