Understanding Why Real Estate Agents Can’t Give Legal Advice

 

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Getting Legal Advice From Real Estate Agents

If you ask a real estate agent if you should hire an agent or an attorney, you may expect to hear that an agent can do just as well. Find out if this is true.

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Author: Stan Faulkner, Founder, Faulkner Law, LLC

Mr. Faulkner is an experienced counselor and litigator with 15 years of experience, having held bar licenses in four states (Mo, Il, Ct and Ga). Stan Faulkner uses this experience and focuses his skills in the pursuit of assisting individuals in probate (trust and estate) matters, guardianships and conservatorships, estate planning, business disputes and contract disputes. Published on June 13, 2022.

If you plan to purchase a home or property, you may want to seek professional advice. After all, there is a lot to consider!

Because a real estate agent is familiar with all aspects of buying and selling property, you would naturally think of them as the best resource for your questions. However, there are a number of reasons you might want to speak with a real estate lawyer or estate planning attorney Marietta, GA instead.

For example, a licensed real estate agent can not provide legal advice or answer legal questions even if they know their answers. If they do, they may be engaging in the unauthorized practice of law or practicing law without a license.

In other words, if an individual is not a licensed attorney, giving legal advice, suggesting specific courses of action, or giving a legal opinion or legal counsel is not permitted. Keep reading to learn more about what real estate agents can and can not do.

What is the Difference Between a Lawyer and a Real Estate Agent?

When buying a home or other property, some purchasers want protection under the law and the legal assistance that only an attorney can give. If you are one of these people, there’s nothing wrong with asking whether you should engage a real estate agent or a lawyer.

Lawyers may advise that you engage a lawyer instead of a real estate agent since a lawyer can perform both functions (buy/sell a property and give legal advice). The issue with this concept is that some lawyers have experience in preparing or flipping houses and others do not.

Unlike real estate lawyers, real estate professionals and agents know how to spot home defects and negotiate for repairs. They may also have intimate knowledge about certain neighborhoods.

Real estate agents are licensed to help people sell, buy, and rent real estate. Their job is to bring buyers and sellers together and are paid a commission. A listing agreement is among the most common written contracts between home sellers and agents.

Real estate agents or realtors will of course know how to put your home’s best foot forward for selling, and how to prepare an offer that is likely to be accepted by the sellers if you are buying. However, real estate agents can not practice law or provide legal advice.

In fact, they cannot answer a legal question or explain potential legal outcomes without violating the real estate laws, even if they know the answer.

 

Consequences of Unauthorized Practice of Law

If real estate agents engage in practicing law or activities that are not legally permitted to them, they could be facing serious consequences. These consequences can include fines, losing their real estate license, and commissions. Real estate agents’ unauthorized practice of law can also result in a lawsuit.

To avoid these consequences, real estate agents should not:

  • Draft real estate contracts
  • Explain a potential legal outcome in case of a dispute or
  • Evaluate certain legal issues and advise individuals on how to proceed.

Needless to say, real estate agents are not legally permitted to file lawsuits, draft legal paperwork or make arguments in court on another individual’s behalf.

Although many real estate clients don’t know the difference between a  legal question and a real estate question, a real estate professional should spot the difference and decline to answer a question that can jeopardize their career. 

When to Hire a Real Estate Attorney

When it comes to purchasing or selling, an experienced individual is required. Hiring a real estate attorney is a wise move.

A real estate attorney can assist you with understanding the potential impacts of this life-changing financial decision. They can also negotiate on your behalf (with your authorized permission). A real estate attorney can also research a potential complex real estate law issue and assist you with any aspect of your case.

Do I Need a Real Estate Lawyer to Buy a House?

In 2021, there were 6.9 million home sales in the U.S. These sales may have worked in all different ways — some with realtors, some with brokers, and some with the assistance of legal teams.

An attorney is required to oversee the closing of any real estate transaction in Georgia, but you do not need to work with an attorney throughout the house hunting and negotiation process.

However, a lawyer can also be a real estate agent. If you want to cover all your bases, especially with a complex transaction, you may want to consider hiring a real estate agent who is an attorney too. They can assist you with legal documents, real estate advice, and general knowledge about the process and could also explain potential legal outcomes.

Because a real estate attorney is a practicing lawyer who deals in real estate transactions, is experienced in the entire home-buying operation, and can counsel buyers, sellers, or lending agencies, they can potentially be helpful to you in the real estate process.

Read more here for a glimpse into how Georgia attorneys discuss real estate law.

Using a Real Estate Lawyer Instead of an Agent

When it comes to comprehending and addressing issues in the documents related to your property purchase or sale, attorneys can help review and amend your contracts.

While buying a property is an enormous investment, this type of transaction happens every day. To some degree, there are common prerequisites and common clauses from one real estate contract to another.

However, completing an entire real estate deal without the assistance of a lawyer might be risky or even illegal, since an attorney is required for closing in Georgia.

Only a licensed attorney can give legal advice and defend you in court if a legal problem arises during the real estate transaction. Consult with a trusted Georgia real estate attorney today to proceed with your real estate investment.

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