Sunday, January 14, 2007

Perils of Real Estate Practice, Part 3

Continuing with my "ideal" real estate matter, the one we never EVER see, here's more reality:

1. A closing is scheduled with just a few calls, in a convenient location. In reality, the scheduling takes many many calls, and even if you "delegate" this to a secretary or paralegal, it takes a lot of THEIR time. If you regularly makes these calls yourself, I challenge you to show me how flat fee real estate is remotely profitable. A tip to save real aggravation.....if you know what is realistic as far as when the closing can happen, assert yourself. Do NOT go with the clients or the brokers aggressively early date. When you do this, invariably you will make the calls, and then get to the last call, and a key player can't do it. As far as convenient locations, other than your own office, all other locations are inconvenient, its only a matter of degree. It's YOUR time, remember that.

2. The closing takes place on time and takes an hour. Uhhh, someone is usually late. When I feel really cynical, I try to arrive LAST, so at least less of MY time gets wasted. I have had a few closings take less than an hour, but I've had many more that took 2-3 hours. That would be ok, if I were on an hourly, but, get the point.

3. The closing is done, and there are no post-closing escrow issues. Was it Shakespeare who said "Nature abhors an escrow"? OK, HE didn't say it, but if a post-closing escrow exists, and we're not getting paid extra to deal with it, WE lose. Of course, many times the only way to resolve a problem at closing is to hold an escrow, so at least you can close. I always try to convince everyone at the closing to "adjust" rather than escrow. The attorneys always understand why, and the clients don't, until you mention the extra attorneys fees....then suddenly they can adjust the problem. (Incidentally, this is tomorrows attorneys fees affect case settlement) You might think, if proper pre-closing prep is done, all issues should be known and resolved, but WHO CAN DO THIS FOR THESE FEES???? So you show up at the closing, get it done, and hold an escrow (for some taxes, or possession, or a judgment, or a lien, or for any number of things). The times when I have charged for a post-closing escrow issue, I felt distinct resentment from the client. Of course, the times I didn't charge, I felt distinct resentment myself. I finally concluded that I have enough resentment, so this is one I try hard to avoid.

4. You send a closing statement; the client appreciates everything you did.....and refers you all kinds of business over the years. I always leave a closing with my closing statement checked and re-checked so all the math is right, and I can send out a clear statement. Its worth the extra time at the closing to be sure. Getting back and having the numbers not work is frustrating, time consuming, and non-compensable. So, be thorough, EARN your money, and don't spend that $950 in one place.
As far as client appreciation, I've gotten some nice, heartfelt thank-yous over the years, and they are always appreciated. I've also had many occassions where I had run through brick walls for the client, and KNEW they had no idea how hard I worked, or they knew and took it for granted.
Lastly, if you are a generalist, and you do real estate to "increase your client base", and hope to be that clients "family lawyer" and get ALL their business, including the juicy negligence cases you find most profitable....BEWARE. Unless you take steps to educate your clients, they will view you as a "real estate lawyer" and refer their "real cases" elsewhere. I once had some difficult clients who I had represented when they bought their house. Six years later when they were selling, we conducted all our business by phone and mail up until the closing. At the closing the wife was in a wheelchair, the result of a pedestrian/auto accident, which was my first knowledge of this. The husband proudly told me about the big settlement, and the big fee their lawyer had made "without doing hardly anything". I told the wife I hoped she was feeling better, and was thankful for the opportunity to work my ass off for a small fee, and my future "opportunities"

and so, I shall rant no more.....

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