Who's better at negotiating real estate contracts…A lawyer, a broker/agent, or a self-represented seller?

Thursday, January 21, 2010, 11:21AM

By: Keith Gordon

Who's better at negotiating real estate contracts…A lawyer, a broker/agent, or a self-represented seller?

Sellers and buyers want to get the best deal possible when buying or selling real estate. Got to love the Budweiser beer commercials of too light and too heavy because that is exactly what this article is about.

Let's start with the profession everyone loves to bash and that would be the attorneys. While not all attorneys' abilities and demeanor are the same, in general, they should leave certain negotiations to the Realtors and stick with the contract related issues such as which name to take the deed in (trust or individual) and other legalities that can affect their client. But, price is not a subject that attorneys should get involved with because they are too-heavy! When things go amuck, it's generally because the attorney steps on the toes of the Realtors and advises their client on price and negotiating strategies. This is not their forte and when they do get involved, it is a hard-ball negotiating tactic to push the other side. Might this be because they are justifying their services? When negotiating, always leave a door open and never slam one shut or create an obstacle that is impassable. Attorneys…Too-heavy!

Studies show that the general public trusts Realtors even less than lawyers. Supposedly, only 7% of the US population fully trusts attorneys. So where does that leave the Realtors? Why would anyone of sound mind and body allow a Realtor to negotiate a real estate transaction? The answer may surprise you. Realtors are aggressive, smart and most of the time, know their stuff. I can speak from a position that few can do because I have over 200 listings in Florida and negotiate as many as 5 deals a week. I can tell you that while I am a skilled and professional negotiator, so are the other Realtors that I do battle with on a daily basis. Realtors fight hard for their buyer clients, do their homework, and push their cause to the extreme to get the best deal possible for their buyer. I seldom engage a nonchalant Realtor and I find them on their game. Realtors…Just-Right!!

Next in line for analysis on the “Who's the best at negotiations” is the by-owner flat fee MLS seller. Flat fee MLS listings, also known as “limited service”, allow the by-owner to represent themselves in all negotiations. This is completely opposite from having an attorney or a broker/agent negotiate for you. When the by-owner allows someone else to represent them, they remain insulated behind the words and actions of a third-party. Sellers that represent themselves can quickly become trapped in a conversation about price and terms with no “dump-button” as all conversation are “live.” The self-represented seller is on the front-lines and has no back-up. Everything they say can and will be used against them in negotiations. Self-represented sellers…Too-soft!!

My advice to by-owners that self-represent when listed flat fee in the MLS is, don't do it! Upgrade your service to Professional ADDvantage™ and allow me to represent you. If you represent yourself, you are exposing yourself without representation to the most aggressive and smart independent work force there is, the Realtors. They know more than you about contracts and you will likely leave money on the table or possibly be going back-on-market with your property after 20 or 30 days because of the buyer's inability to close. As well, you might agree too fast to a deal or not know local protocol and be left with less at closing. There are always issues such as appraisal, inspection reports, addenda, pre-approval letter, dead-lines, and other matters that come up and need to be dealt with promptly and professionally.

In conclusion, my advice is to seek an attorney when you have “tax” or “will” related issues such as closing a property in trust. Use an attorney when doing a complicated commercial deal or to review the language in a residential transaction. But, keep in mind, FAR and FARBAR contracts have been approved by the Florida Supreme Court. FARBAR contracts have been approved the Florida Association of Realtors and the Florida Bar. If you are going to represent yourself, do it for the right reasons. Some flat fee MLS “self-represented” sellers are builders, investors and others that are apt at contracts. Even the most experienced self-represented sellers need to be careful about what they say and how they engage a buyer. I see “back-on-market” all the time with even the most experienced investor-type clients at ADDvantage®. Professional ADDvantage™ costs $1050 more than our Not Available self-representation plan but well worth the money!