It’s not commonly understood that, depending on where a transaction takes place, Buyers are the only party to a real estate transaction who do not benefit from legal counsel.
How does this work? As the party ultimately responsible for the real estate transaction, Brokers have legal representation. Agents act on behalf of the Broker and typically split commissions with them in exchange for services provided, including access to legal counsel. Finally, the Seller is represented by a Listing Agent and has the benefit of legal counsel by proxy.
This series of relationships between Broker, Agent, and Seller is by design. It minimizes legal troubles, at least for the Broker, Listing Agent, and Seller.
What about the Buyer’s Agent, you ask? In some States, Buyer’s Agents hold a fiduciary duty to their Buyers and have legal liability depending on the circumstances. However, depending on the State the property is located in, Buyer’s Agents may not owe the Buyer a fiduciary duty. In other words, many States limit the legal liability of the Buyer’s Agent so the Buyer has little legal recourse for problems involving the public document record, contract language, disclosures, or performance. These States are colloquially referred to as Buyer Beware States.
Consider the Buyer’s position:
- A real estate transaction is typically the largest financial transaction of a Buyer’s lifetime.
- Each real estate transaction is unique.
- The legal risks of the transactions are almost always invisible.
- The legal risks can be hard to interpret and understand, even for attorneys.
- State laws treat the disclosure of risks differently.
- Buyers buy but a few times in a lifetime.
Given the circumstances of the real estate transaction listed above, it makes sense that Buyers would benefit from legal representation at least as much as Brokers, Agents, or Sellers.
Involve an attorney early in the buying process by allowing a TC Certified attorney to review your purchase and sale agreement before you sign. Use TC Drafting to upload the unsigned agreement for discussion before you commit your signature to it. If you’ve already signed, use TC Review to upload the signed agreement for discussion of your legal options going forward.
The information in this Post is not legal advice. Legal advice is based on specific facts. This information is necessarily general in nature.