A Judgment Call

I was recently approached by a couple who have followed my column for years, asking if I felt I might be a good match for a project they were considering. They had recently decided to sell their long-time property to another couple on very favorable terms without putting the property on the market. Their question was whether it would be better to have the transaction handled by an attorney or a real estate broker.

My answer was very simple: It depends.

In the case of an attorney, they typically have a greater understanding of the law and are capable of writing complex contracts. However, in this specific case, the contract they wanted was for a single-family home, which is supported by the standard CAR (California Association of Realtors) contract forms. These forms have been developed over decades to comply with California real estate contract and disclosure laws. 

Another factor to consider is the nature of the property itself. In this instance, the home is in a rural setting on acreage, accessed by a private road and served by a well and septic system in the Santa Cruz Mountains. An agent typically brings more "boots on the ground" experience regarding the various moving parts involved with these types of properties. They are often a better source for finding the right experts and contractors to assess the property during a responsible due diligence process.

The next factor is cost. Since an attorney typically charges by the hour, their fee will likely run less than an agent’s compensation structure, which is typically commission-based. On the other hand, when presented with a situation where both parties are already in contact and the property has already been located, an agent will often be more negotiable than usual on the commission rate.

The final factor to consider is the comfort level of both sides. It is important to determine if everyone feels secure having only one agent or one attorney handle the entire transaction. In some cases, the parties may still opt to have separate representation

With all of these factors in mind, we decided it would be best for us to all meet at the property to get a sense of whether all parties would feel comfortable having me handle the transaction as a dual agent. The initial meeting went well, and we are now onto the next phase: getting the buyers pre-approved and preparing the contract with shared anticipation of the adventure that lies ahead.