@Russell Brazil
@Cara Lonsdale
@Matt Shields
@Stephanie Medellin
Hi Stephanie. CORRECT... and one I never mentioned to the other posters.
Because these transactions are very large, neither Broker every represent the Buyer or Seller legally nor hold Escrow.
Once the meeting of the mind occurs, the Seller's Attorney then sends a Contract to the Buyer's Attorney.
The transaction is then out of the hands of either Brokers/Agents.
The Attorneys for either side typically collect $2k each.
Even after, the Closing Agent is normally another Attorney.
Also, Closing is normally done at the Bank's Attorney's Office.
Typically, there are 4 or so Attorney's, each representing all of the Party's interest, The Buyer, The Seller, The Bank and the Closing Agent and/or Title Company.
At the 9 Closings I have been a party to a Transaction, normally as the Buyer, there has only been ONE time that I have ever seen a Brokerage send over a representative to collect their check. Other than that, the check get's mailed to the Seller's Broker.
Cara: Just to flesh out the Analogy again.... My role in the pilot analogy would not even be to fly the plane. That would be the two Attorneys, both understanding the final destination, and a written Agreement on how to get there would be in place.
My role would only be to let the Passengers legally know that they can board the plane. BUT, after they board, they must speak to the one of the two Pilot representatives to determine if they should fly over the Empire State Building or maybe Rockerfeller Center so that they can get a good look. But ultimately, both Pilots will need to agree to the final destination.
Even the Earnest Money and Deposit money is not touched by the Broker. That's all handled by the Attorneys.
As a side note, the Contract here in NYC is approximately 10 pages long. It's boiler plate and contains every contingency you can imagine. Brokers/Agents here are not allowed to do anything to that Contract for fear of practicing Law without a license. Our E&O won't cover changes to legal documents.
From what I understand, we can fill out boiler plate legal documents, but we are not allowed to make any other changes.
Real Estate Licensee's main duty here is to have the Parties have a "Meeting of the Minds."
The Attorneys take over right after certain disclosures of Agency has been given.
Even the Attorneys will attach Riders to the Contract. Typically, you will see Lead Paint, Asbestos, Termite, etc. disclosures.
As an experienced Buyer, I already know all of the Contingencies in the boiler plate Contract of Sale, and probably ALL of the added Riders for typical disclosures.
The Property Condition Disclosure is also not even bothered with by the Brokers. That again, is handled by the two Attorneys. Typically, a $500 Credit is given to the Buyer to sign a Waiver of Disclosure and a Rider declaring that the property is being purchased "As Is."
I have NEVER seen a Property Disclosure filled out in any of my transactions. The $500 Credit is done automatically by the Seller's Attorney because it essentially protects the Seller. It's just too easy to forget to disclose something and will lessen the liability of the Seller and increase the responsibility of the Buyer to conduct his own Property Inspection due dilligence.
I suspect that outside of NYC, a lot of these kinds of things are done by the Broker's office.
However, the Role of the Broker, after the "Meeting of the Minds," is VERY minimal.