Why Real Estate Agents Can't Give Legal Advice
Consider Hiring a Lawyer for Your Legal Questions
If you ask a realtor whether to hire a real estate agent or a lawyer to buy a house, you can probably expect the realtor to suggest hiring an agent. On the other hand, if you ask a lawyer which type of representation is better, the lawyer will probably suggest the opposite. Each profession has its own advocates, but the best solution may not be either of those options. It might be both.
You may be wondering: Why would you want to spend money you don't need to spend to hire a lawyer when you're already working with an agent? Some buyers want the legal protections and advice only a qualified and competent real estate lawyer can provide.
Hiring a Lawyer vs. an Agent to Buy a House
Lawyers may say you should hire a lawyer rather than a real estate agent because a lawyer can provide both services. The trouble with that idea is few lawyers professionally sell real estate. It's a hat they don't often wear.
Lawyers might not know the specific neighborhoods, how to prepare a comparative market analysis, how to draw up a real estate contract, or anything about the listing agent—nor the profession of real estate. They also may not know how to spot home defects, negotiate for repairs, or perform any of the other dozens of tasks an experienced buyer's agent is accustomed to doing on a daily basis.
On the other hand, real estate agents are not licensed to provide legal advice. This means they cannot answer a legal question, even if they know the answer, without breaking the law.
An agent could potentially lose their real estate license if they tried to practice law.
A Real Estate Question vs. a Legal Question
Many real estate clients cannot differentiate between a legal question and a real estate question. If it pertains to real estate, many buyers don't see it as a legal question.
For example, if their real estate agent tells them they can't give legal advice, they may nod their heads in understanding—and then say, "OK, I won't ask you a legal question, but how do you think I should hold title?"
That is, in fact, a legal question.
Now, if a buyer wants to know how many square feet are in an acre, an agent can answer that question with no problems. But if a buyer wants to know the ramifications of a shared driveway easement, that is a legal question.
You may be wondering: What good is a real estate agent if they can't answer any legal questions about real estate? It can be quite frustrating for a buyer.
Here's another example of a legal question that sounds like a real estate question: The buyer asks whether they can cancel this purchase contract and get their deposit back.
An experienced agent might point to the paragraph in the purchase contract pertaining to the return of earnest money deposit, and they might disclose what usually happens with regards to their experience. However, real estate agents can't advise a buyer to sue the seller nor guarantee the deposit will be returned.
If the agent knows the buyer's deposit is at risk, they might share a few situations about the way their past clients handled these matters. But in the end, they will be forced to suggest a buyer obtain legal advice.
The Bottom Line: a Lawyer vs. Agent
Remember this: It is not that the buyer's agent does not want to help, it's that they can't give legal advice. Additionally, if they violated the law and expressed a legal opinion, a buyer could not rely on it anyway.
While lawyers typically charge a few hundred dollars an hour, a brief consultation with a lawyer is generally the way to go. It's much better for a buyer to obtain true legal advice than to try to squeeze it out of their agent just because they don't want to pay a lawyer.
So, there you have it: Use a real estate agent for real estate advice and a lawyer for legal advice.
At the time of writing, Elizabeth Weintraub, License #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.