Attorney Approval failed - Should I keep my attorney? (NY)

11 Replies

Hi! First post here. Story time!


So I am in the process of finding my "House Hack". Found a Duplex (no hoa!), made a deal, signed some docs, found an attorney, and 7 days later the Seller's attorney vetoed the deal. 

Some notes:

  • I found this attorney through a business card rec at a real estate networking event.
  • I had no prior relationships or recs, however I made a point to vet the lawyer who I'd be working with (asking their background in REI, etc.)
  • The lawyer walked me through the contract - we found that there was a shared driveway included in the sale. This was something that I had missed, the seller's realtor didn't mention and my realtor missed. I raised concern, as the driveway in view definitely looked like there was 0 shared ownership. 
  • My realtor said she'd look into it, and that was the last I heard. 
  • 5 days later, an email that the lawyers could not agree on a contract and the offer was turned down

My attorney said they hadn't heard a reason for the denial, other than it was denied. After some digging, I found out that the deal was denied because:

  1. The contract sent by my attorney was "unusually long" at 6 pages, both my realtor and their realtor said they'd never seen one that long.
  2. The terms were characterized as "too forceful" and intimidated the buyer into backing out.
  3. My attorney was asking for a formal legal agreement to be produced on the shared driveway.

Here's where I am. I took it as a learning lesson initially, "OK, I shouldn't just use a random business card lawyer."

But then...

I started thinking about it, and after reading the contract myself I felt that the attorney did their job in protecting my best interests as best as they could. Although my realtor doesn't expect me to use them again, and said they'd never recommend them to a client, I can't shake that feeling. Sure, my attorney could have communicated a bit better, but from everything I've been told, she was in the dark until the contract was denied. There was no point of negotiation, and IF there was, she didn't back down on making sure my best interests were met. Oh BTW, I chatted with the seller's agent and found out the owner had issues with the neighbor and the driveway so there was "no way they'd get a signed formal doc over the driveway". 

SO, here's where I come to you BP. 

Although the general consensus in my immediate group is to find a new Attorney for my next offer, I can't shake the feeling that the attorney did their job. What would you do in my situation? I can provide the contract for someone to look at if desired.

Follow up question: Is there a culture of lawyers dissuading sellers from complicated contracts?

Thanks! 

Nic

This sounds like a 'listen to your gut' decision. As an agent, I've heard other agents talk about not wanting to work with certain inspectors because they are tough on a deal.  Although I've worked with some inspectors who are a bit too opinionated for my liking (basically talking my client out of buying), for the most part, I WANT an inspector working with my client to uncover all potential issues.  Same with an attorney. I want them to stay 'in bounds' working with the transaction not against it unless they see real issues (not imagined ones that would perhaps happen 1 in 10000 times). 

and.. it sounds like there are issues that the attorney uncovered.  'real' issues.

Now... I'd also suggest having more than one attorney available that you KNOW better than you knew this one before hiring him.  Develop relationships, learn their strengths.

Bottom line, trust your gut especially as you get experienced

Rj

RJ Reynolds, Real Estate Agent in MA (#111679)
617-969-0453

Who created the contract that is in question? I only have two house deals in NY and in a different area, however they were both sent by the seller, not the buyer.

On face value your attorney sounds more like an attorney I would want, someone looking out for your best interests. Normally they go in strong and maybe they negotiate a little back. The seller seems to have gotten cold feet on your deal. I'm not sure I would toss the attorney at this point.

@Nic Bernal

I’m not sure why you needed a more formal driveway agreement unless the one documenting the shared driveway was deficient. I would hate to buy a driveway I couldn’t use. I am not sure about the other issues but I would not be in haste to throw the attorney under the bus because a six page contract is not a lot of pages these days. 

@RJ, thank you for that. I think she struck a nerve in the client. Either way, they already took the other offer under contract before their lawyer spoke to us. Without this, I wouldn't have known there is an ongoing disagreement with the neighbors over the driveway.

Originally posted by @Carl Fischer :

@Nic Bernal

I’m not sure why you needed a more formal driveway agreement unless the one documenting the shared driveway was deficient. I would hate to buy a driveway I couldn’t use. I am not sure about the other issues but I would not be in haste to throw the attorney under the bus because a six page contract is not a lot of pages these days. 

 I was just thinking that! The current tenants all park on the street. I have off street parking ($50-100 add'l rent a month) and I can't use it. Worst case scenario, I'd be missing out on $1200 a year from two units. 

I would turn this around and ask why the seller and Realtor are spooked by an attorney asking thorough questions and asking for the agreement or easement for the driveway.  Sounds like they had another buyer they thought wouldn't ask questions.  There may have been an underlying problem they were avoiding.  

We don’t use attorneys for contracts here, but......items like this would be discussed with Me as the client, and I decide which stance to take, which items are important and which are not.

My guess the driveway was the issue and there was another offer in the wings.

@Nic Bernal

In my experience, for residential class properties (4 units or less), using the standard state purchase agreement (usually by the Association of Realtors) is the norm. All of my SFR purchases and sales have used the respective state form.

However, with the purchase of "commercial" class properties (5 units or more), custom contracts are very common. The bigger the deal, the higher frequency of custom contracts. In fact, it's not uncommon to take 2-4 weeks just to negotiate the terms of the contract.

So to start: there's the issue of expectations. If you're dealing with a non-sophisticated seller, who only has dealt with with only SFR and small MFRs, they could be quite surprised that you hit them over the head with a custom contract. That may have spooked them.

Secondly, my experience with attorneys is that they are adversarial not co-operative. That means they represent and defend you to the best of their ability, even at the expense of other parties. They don't get paid to make deals happen, they get paid to make sure the legal deck is stacked in your favor. That sounds great, but it's hard to make deals happen in that context. You're the deal-maker, so if your attorney is being overly adversarial, it may be up to you to tone it down and make sure things don't get out-of-hand.

A good attorney will understand that, and will work with you to not "kill the deal." However, their job isn't deal-making. Their job is to fight for you and in doing so, they might kill the deal, so keep that in mind.

Hope that helps!

James

@Nic Bernal - 6 pages is not a long contract in Downstate NY, but the Seller's side normally drafts it. From your story it sounds like your attorney was protecting you. Trust your gut and keep her.

Hey all, just wanted to say thanks for all the help. I feel way more confident in my own deductive reasoning and gut feeling. Nothing lost, just a bit of time. Experience gained was worth it though. 

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