Based on my observations most people buying or selling their homes or apartments are getting closing attorneys from their real estate brokers.
It is understandable since the real estate broker is holding the client’s hand through the real estate purchase transaction and is referring them attorneys, mortgage brokers, home inspections companies, etc.. It is not always the case, but in my view accepting an attorney recommended by a real estate broker is a very dangerous practice.
Usually, the real estate closing attorneys recommended by the brokers work with that broker for an extended period of time and have a long-term relationship. The lawyer will have dual loyalty, both to the broker and to the client. Say he or she finds a problem with the deal, in the contract or the title report.
Now the lawyer has an inherent conflict of interest, does he or she advise the client of the issue or close the eyes so the deal goes through? If the lawyer causes enough contracts to fall through,
the broker may stop referring clients to this lawyer.
I remember that when I practiced real estate law I had numerous disagreements with real estate brokers when I felt I had the duty to point out to my clients problems in the deal. If the deal got cancelled because of it, that broker would never send another client to me.
Again, I am not saying that this may happen with every lawyer recommended by your broker – some attorneys may put your interests first, ahead of the recommending broker. However, why even worry that your lawyer may be tempted to not be completely loyal to you?
I recommend declining attorney recommendations from your broker. Instead, you should ask your friends and family recommendations on who they dealt with. This way you will get an unbiased opinion on a real estate lawyer.
Remember that you are probably making one of the biggest investments in your life when purchasing a house or an apartment. Having a wrong attorney represent you, who does not have your best interests at heart could be a disaster.
Michael Levitis is not an attorney and can not give legal advice. You should consult with an attorney prior to making any decision affecting your legal rights.