Monday, January 8, 2007

Perils of Real Estate Practice, Part 2

Yesterday I outlined a simple, albeit fictional, deal, and promised to compare it to reality. Here goes:

1. You meet the client and establish a "relationship". Sometimes you start out just on the phone, and you either connect or you don't. Sometimes you have an initial meeting and you realize this client should not be buying a house, but how do you convince them of it? Sometimes you just get a bad feeling. Sometimes the initial meeting takes way longer than you thought, and you know that every aspect of the deal is going to be like that.....and that's always a profit killer when you are on a flat fee.

2. You advise them "pre-contract" so they understand the process, and if the first deal doesn't go through maybe you get paid something for your time......and for a lot of reasons, maybe you don't.

3. You get initial details on a solid deal from an honest real estate broker. Pardon my oxymorons, but in general I have come across real estate brokers who are "hard-working", "tenacious", and even "enthusiastic", but then I run out of complimentary adjectives. One thing they do a lot is CALL you, and they want one find out when the closing is. I have had brokers who actually told my client, and the other party, when the closing was, even though we attorneys had not scheduled it yet. I guess the way they saw it, they took a shot. You can't make these things up.

4. You represent the client on the contract (which of course goes smoothly and is all done via the mail). Uhhhh, usually it goes back and forth and back and forth and takes WAY longer than it should, and engenders numerous calls to and from EVERYBODY. When brokers offer to pick up and deliver the contracts, I usually let them, let em WORK.

5. The client gets timely financing without a hitch. OK, sometimes this happens, but only because some banks are so careless they'd give a loan to a ham sandwich. Of course, when your client has trouble getting financing, everybody's stress gauges go up, and you realize your client should have gone to one of those ham sandwich banks, and everyone is blaming you for not sending him there. Any lawyer who has ever been in one of these mortgage problem deals, knows all the extra work thats coming (for no extra fees and tons of pressure)......and all the questions from the my down payment at risk? can we kill the deal? can I get an extension? can I re-apply? when is the closing? who put that mustard all over my back?

6. You review the title report and it is clean. Maybe one out of ten you don't have an issue. The rest of the time, somebody from your office who knows what they are talking about (YOU?) has to make some calls or draw some affadavits to solve a problem. Extra fees? NO, its included.

I have a few more, but I will deal with them on Wednesday, in Part 3.

Tomorrow is my 50th birthday, so I will post some random thoughts on that......for a goof....

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