Broker and attorney from same agency

Asked by rssraj, 11375 Tue Jan 31, 2012

Guys

Is it okay if I hire a broker and my attorney from the same real estate agency? Don't ask me how that's working but there's this company that's also in partnership with an attorney - they work out of pretty much the same office. Both were attorneys before and one guy started his own real estate business and he's the licensed broker. They have been friends and business colleagues for a long time

I wonder if it's okay going with this or if there may be some conflict of interest on either's part and if I should find a separate attorney - i like the broker and sticking with him

Thanks

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Answers

15
Jenet Levy, Agent, New York, NY
Wed Feb 1, 2012
Rssraj,
When you refer to the broker as "my broker," it sounds like he is your buyers agent. Your buyer's agent acts in your interests. When you are working with a buyer's agent, and you are at the point of bidding on a property, your agent will always recommend a real estate attorney to carry out your due diligence. These individuals have worked together and have a good working relationship. The only thing that is different is that they now share the same office. The attorney, working as your attorney, will be protecting your interests as well. Agents usually recommend lenders as well. Some real estate offices have an in-house lender that actually is situated in their office at least part of the time.
I think your question is a great one, but I don't see a problem; your team just happens to be in the same space. It's really no different than your agent recommending an attorney a half mile away.

Best,
Jenet Levy
Halstead Property, LLC
jlevy@halstead.com
212 381-4268
http://jenetlevy.halstead.com
2 votes
Janet Nation,…, Agent, Baldwin, NY
Thu Feb 2, 2012
Karla, Isn't that the beauty of referrals, when someone that you already trust give their recommendation. Why would professionals want to tarnish their reputation. In our business we love referrals (I know I do) and most of us will try to do the right thing so that we can continue to receive repeat business. So what if they are friends, they are working in different capacities for a mutual client. Life is not so cut and dry, a little warmth goes a long way.
1 vote
Joseph Runfo…, Agent, Staten Island, NY
Thu Feb 2, 2012
Some real estate lawyers and independent mortgage brokers believe that while the practice may be legal, there is a conflict of interest when a broker, rather than the buyer's attorney, coordinates a home purchase. The State Banking Department, which regulates mortgage banks and lenders, advises people to shop around for mortgages and find their own lawyers.
Web Reference:  http://www.clovelake.com
1 vote
Mitchell Hall, Agent, New York, NY
Wed Feb 1, 2012
In New York State attorneys may act as brokers without obtaining a broker license and may collect commissions. However they must obtain a broker license if they employ salespersons to work under their supervision. Attorneys may not represent individuals both as their attorney and broker in the same transaction as this would present a conflict of interest.

As long as the attorney is not acting as both your broker and attorney it should be fine.
Web Reference:  http://nycblogestate.com
1 vote
Joseph Hasti…, Agent, Bayside, NY
Thu Feb 2, 2012
Hi Raj. Based on what you've said, there appears to be no conflict of interest here. If you feel you might want the names of other Attorneys to shop a price for their services, that would be wise. Other than that, they each serve distinct and different aspects of a purchase. Since most folks want to feel comfortable with whoever they work with, I would keep that in mind. Other that that, go for it. Good luck.
0 votes
Stefani Pace, Agent, New York, NY
Thu Feb 2, 2012
You can use both but you want someone who specalizes in one field. NYC is to complex to spread yourself as a lawyer and a broker.
Web Reference:  http://www.elliman.com/space
0 votes
Scotty Elyan…, , New York
Thu Feb 2, 2012
Get a different attorney. I am surprised more people don't feel this way.
0 votes
First Last, , 90002
Thu Feb 2, 2012
I would not hire that attorney.

These guys are too buddy-buddy. You're right and you are smart to be wary. Because the broker has a strong incentive for the deal to go through, and that attorney may, even on an unconscious level, be a little less pro-active in his investigation of the property (due diligence) than he would otherwise be if he weren't business partners with your broker.

You want an attorney who will not hesitate to advise you to call off the deal, or at least re-think it, if it's not in your best interests.

Brokers and agents use a term called "deal killer attorney," and no attorney really wants to get a reputation as such, because then they won't get referrals from real estate agents. A deal killer who kills deals because she or he doesn't understand how co-ops work, for example, would just be a bad attorney in my book. But an attorney who warns buyers about major legal pitfalls is doing the job they were hired to do, and if they deal gets killed as a result, so be it.

I have a list of attorneys I give to people. I am not friends with any of them, and I would not socialize with any of them. They are on my list because trusted people have told me they are good eggs, and because they are real estate specialists and experts. One attorney is a kind of a friend to my brokerage company in that he gives talks for us once in awhile, but business partnership it is not.

It's always good to get a fee quote from at least 2 attorneys anyway, as fees do vary.

Karla Harby
Licensed Real Estate Salesperson
Charles Rutenberg LLC
New York, NY
212-688-1000 x146
kharby@crrnyc.com
0 votes
Janet Nation,…, Agent, Baldwin, NY
Thu Feb 2, 2012
If your agent is representing you as a buyers agent and you have totally satisfied up to this point with your experience with that person, why not use the attorney that he or she recommends. I personally have my own external team, it just makes for a smoother transaction when all the key players in a real estate transaction are on the same page and every seasoned agent knows that. It doesn't matter if they share the same office, that's irrelevant, they work in different capacities but obviously well together. All the best.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Wed Feb 1, 2012
If you are uncomfortable using the attorney/situation, you are free to hire whoever you wish....
0 votes
Jolie Muss, , Upper West Side, New York, NY
Wed Feb 1, 2012
rssraj,
What is your agency relationship with your broker? (Were you presented with the NYS agency disclosure agreement form at first contact?) Is he the listing/seller's agent or the buyer's agent? If he is the seller's agent than his loyalty in only to the seller and it would not be wise to use an attorney that has a close relationship with the broker. In reality it is best to have your own attorney, and if you don't know any often the buyer's broker can present you with a list of attorneys that are know to be competent and to have local real estate experience.
0 votes
Josh Rubin, Agent, New York, NY
Wed Feb 1, 2012
If you would like a list of attorneys to consider please let us know.
0 votes
Robert D Hug…, Agent, Devon, PA
Tue Jan 31, 2012
rssraj, Its really your call. If you feel comfortable with this arrangement and there is full disclosure in writing then it should be fine. If you do not feel ok with this situation, better to find a qualified attorney with no connection to the Real Estate broker you work with.

Best of luck,

Rob
0 votes
Scotty Elyan…, , New York
Tue Jan 31, 2012
I would go for something more independent.
0 votes
John McGuinn…, , New York, NY
Tue Jan 31, 2012
As long as everyone is representing you, then there is no conflict of interest. In fact, I would say that it's ideal to have your lawyer and your real estate broker working so closely. This way, information will be shared quickly and with less mistakes. This is especially important during the creation of your sales contract.
0 votes
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