By Diane Usher
Lawyers, seeking to revive their diminishing role in the real estate transaction, have suggested an expanded role for themselves. While Realtors pocket thousands of dollars for a real estate deal, so the argument goes, lawyers are lucky to make $400 for their role in the same transaction.
The professional environment for real estate lawyers has shifted, especially with the advent of title insurance and electronic registration. This puts pressure on this segment of the legal community and prompts questions about how to make up for lost revenue.
So why not get into the business of actually selling real estate, they ask?
Before lawyers start running door-to-door to solicit listings, they should ask themselves some hard questions:
– Do lawyers want to take on contingency business? Are they willing to put up money for marketing and to invest their time with the very real possibility of no return?
– Would lawyers be willing to share their fees with other professionals co-operating in the real estate transaction? As Realtors, we quickly learn that encouraging the co-operation of other Realtors vastly expands the pool of potential buyers and sellers for our clients.
– Do lawyers want to develop the skills necessary for marketing and selling properties? I'm thinking about such skills as salesmanship, appraisal skills, market and marketing knowledge, negotiating, construction and cost estimating.
– What about developing the extensive network of buyers and sellers required to be successful in real estate?
– Will their errors and omissions insurance cover expanded activities in real estate?
Real estate is a business requiring adroit interpersonal skills for success. Those attracted to real estate generally possess such skills and learn to employ them effectively in the marketplace.
After considering all these matters, if a lawyer is still interested in selling real estate, I welcome that person to a career that rewards hard work and enterprise. I also encourage him or her to take the courses we must take in order to give them a head start and to protect the consumer. We must learn how a house is constructed, how to accurately measure buildings, how to write an advertisement, and about the importance of abiding by our codes of ethics. If lawyers want to sell real estate, they should learn that, too.
Real estate lawyers are important participants in the home buying and selling process, lending their learned minds to the protection of our mutual clients. That's why our association encourages consumers to consult a lawyer before entering into a binding contract and to use the services of a lawyer when closing a deal.
I sympathize with lawyers who must face the pressures caused by change. We know about such pressures because the environment has shifted for Realtors, too. Realtors today face pressure to reduce their fees and competition from homeowners selling their own homes. Fewer people are
entering our profession because it has become more and more difficult to do so, and rightfully so.
Today's real estate practitioner must take more courses than ever before to enter the profession. He or she must then attend mandatory continuing education throughout their career.
And in Ontario we now have a self-imposed Code of Ethics and mandatory errors and omissions insurance as part of a comprehensive consumer protection program.
All professions must adapt to changing roles caused by a changing market. We still see a strong and important role for lawyers in the real estate transaction. But in the end, it is the consumer who will determine which professional should be involved in which aspects of home buying and
Diane Usher is president of the Ontario Real Estate Association.