attorney as broker for fee

My first reaction is that there is no way a seller is going to pay you a broker's commission for buying the apartment for yourself. It's absurd. And I too am a lawyer. If you hear otherwise, let me know. But it sounds nuts. Don't know how much negotiating you do in your area of law, but keep in mind also that acting as your own agent in negotiations has all the potential pitfalls of going pro se in court. It's possible and it may save you a lot, but on the otherhand, you can't very well play good cop/bad cop when it is just you and you may not be able to exploit certain opportunities to better your position. There are negotiating advantages of having an intermediary. Please post how this all works for you. I think a lot of people on here would love to know more about not using agents (or more accurately, not having commissions influence the process). Good luck.

Couldn't disagree with "kylewest" more! I'm doing this right now, I'm an atty. buying a place with my wife, and I'm our broker and will get a check for 3% at closing!!! Do th math, that a lot-o-cash! A monkey could serve as buyer's broker; anyone can find listings/open houses and getting a board package together aint rocket-surgery or brain-science. IMPORTANT first-step, get a broker license (and #)from NY Dept. of State before anything (without a broker # the selling broker may try to stiff you out of your 3%--under a hyper-technical reading of the regs. The "application" for a broker # is a one-pager; name, address and a small fee. Whenever you go to an open house sign your name as the broker...You passed at least one bar exam, right? This will be a cake-walk!

there is a NY court case on this as has there been many posts on this. Kyle West is absolutely wrong! Attornies licensed as such in New York, by virtue of same may act as brokers under New York Law without the need for licensure as such. I am buying a place now as well as I am also an attorney. However, brokers and/or developers are free to force you to sign a co-broker agreement which generally stipulates that you may not collect a broker fee for a unit in which you are the purchaser. Either refuse to sign this or ask for in writing an offset of your share of the broker fee at Closing. Having said that, you should send in your application ($150 fee) to avoid unnecessary problems. You do not have to fill out the app, just check that you are an attorney. The big houses (Pru, Corcoran) generally have not given problems on this. The smaller guys will b/c they are more concerned with squeezing out every dime than making a sale as are Pru and Corcoran. See Liuzzi v. Negro. I add that particularly in this market, brokers should not give you a problem co-broking. As to the 3%, not all co-broke fees are 3%, some are 2.5%.

btw, kyle west--- if you want a guy to act as your buyer's broker, i'll do it for you, we can talk about the rest ad I certainly would not charge the full 3%.

I'm fascinated by this. Never imagined you could broker for yourself but am happy to be educated on this. I mean, obviously one can buy without a broker, but to be your own broker and get paid sounds terrific. Is there an annual renewal fee for the broker's license? Can you just cancel the license after the sale? I guess I'd take 3% off the price and hazard negotiating on my own--that's a LOT of money! Why don't all lawyers do this?

kylewest-- Its not set in stone. I've been turned down by many a broker when I bring this up at which point I walk rather than risk having to have a contentious negotiation period and/or have to sue them for the co-broke fee. The big guys, Pru and Corcoran just want to sell and usually go with the program lest they anger the New York State Bar which they are not eager to do. Moreover, as is my read of the applicable case, a written agreement supersedes the right to collect a co broker on a self purchase/sale. However, absolutely, New York case law says that the broekr commission statute was not intended to freeze out a broker from a transaction in which they are a party. As to why attornies do not know this and/or that they can be licensed as RE Brokers. The ones with a brain do. And not all attornies are created equally. Broker licenses are biennial and I recall its like a $100 or $200 renewal fee. Well worht it to save $20 Grand and Up on each deal. On resale, it works too.

Ouch. I'm an attorney who bought without any "buyer's" broker. Seller's broker, of course, took the full 6%. Had no idea about this. Ouch ouch ouch. I could have had the seller give me 3%???

masterq: my reaction exactly! I haven't sold yet, but when I do and am buying I'll at least use this as leverage in the price negotiations. Of course I knew attorneys didn't need to take RE exams and can be brokers essentially for the asking, but this idea of brokering a sale that one is a party to is novel to me. totallyanonymous: thanks for the info.

totallyanonymous, I understand the benefit from a buying perspective, but why would it matter on resale? Essentially it the same as FSBO, correct? For the buy side, why wouldn't a closing attorney offer these services for a discounted fee?

b/c on resale you can stipulate to the selling broker than you expect to receive half his/her fee as a party to the transaction. This of course would compel the selling broker either refuse to represent you or otherwise to have to sell the place themselves or else share the rest of the fee with the buyer's broker. Remember, many brokers do almost nothing--they get a listing, post it on their site, show up to open houses and let other brokers do the work.

JM--as to your other point on a Closing attorney offering services as a broker, that would be a huge conflict of interest with respect to attorney ethics. An attorney would never be able to act both as an attorney and broker on the same transaction without running afoul of attorney ethics regs.

update--the case is liuzzi v. *nigro* and you should obtain licensure (even as an attorney) to avoid any problems invoking this.

Yes, an attorney may collect RE commission as a broker. No matter if he's buying for himself or not. It takes very little effert for attorney to get their broker license.

Here is the catch: supposing a property in Brooklyn is listed with a broker-member of Brooklyn MLS. This broker MUST offer cobroke to any other broker-member of the same MLS. Period. He is under NO OBLIGATION to cobroke with any other licensed NYS broker if they are not members of his MLS. Listing broker has every right to refuse to pay commission to that attorney who wants to get easy 2-3%.

In order for that attorney to be able to collect commission for sure, not only he would need to get their broker license (which is easy), but also he would need to become MLS member (which is somewhat expensive, much more than 3 percent)

an attorney just needs to be an attorney to get their 3% commission. that's it. see the saving clause to the license law. confirmed by a simple phone call to the nys lisencing board. that law lisence keeps paying dividends.

Jimmy235:

1. brokers are agents
2. when attorneys act as principals they cant also act as brokers
3. however, you can ask for an implied co-broke
4. to reduce deal commission from 6% to 3&
5. the brokers i have spoken to are generally open to the idea

Where on earth did you dig up this three year old thread? Why?

So, I've read a few threads that cite the need to be a broker member / MLS to be entitled to receive a commission while the threads above say its easy and standard.

I'm looking to buy a sought after Brooklyn place being sold (which I think will sell in less than a week) by a broker and was hoping to have a lawyer buddy act as my broker. Can my lawyer (separate from transaction counsel) simply contact the selling agent as my broker and submit the offer? Is there a protocol to ensure that the selling agent will accept my offer and pay his buying commission? Have people actually been successful under normal circumstances?

This is absolutely fascinating. I've spoken with two brokers in the past two months and suggestion that I split the fee with them as a lawyer buyer/broker has made them very upset. It's like i've threatened their honor by suggesting that I could act as my own broker and receive my 3%.

I think they have boiler plate contracts here in Western New York that basically stipulate that only members of the Real Estate Association can share in commissions. This seems to run afoul of anti-trust laws, and I can't help but think they are getting upset because they know they are doing something wrong.

I hate to weigh in after all this time, but the appropriate statute is Real Property Law Section 442-f (the Saving clause). It says "the provisions of this law shall not apply to...attorneys." NO NEED FOR A BROKER's license, no need to join MLS. Problem is as you see above, many non-attorney brokers with whom you will co-broke do not know this. You will need to decide whether suing for the fee (to which you are entiltled) is worth it. In most cases, it is.

One final note, you may encounter RE agents who try to suggest that you are taking their fee. I have only co-brokered houses I was purchasing as my own residence. Not one of the seller's agents advised me that I was entitled to a fee (and all fought me when I tried to collect it). In short, they would have been perfectly happy to pocket my fee and say nothing.

Any input from front_porch? She's not an attorney.

1. it is black letter law that a person cannot act as a principal and agent in the same transaction
2. that rule of law is not affected by the licensing status of a buyer

3. so I do not think that attorneys can ask for a broker's fee when they are buyer-principals
4. that is also true for real estate brokers who own properties they are renting

5. to the best of my knowledge they cannot ask for brokers fees
6. if that is true the same rule should apply to attorney buyers

4.

this sounds great on paper, but i have issues with the ethics of it as i have seen it practiced. this scenario assumes that you are dealing directly with the listing agent. because if you aren't, there are already 2 agents on the deal and there is no "free 3%". the 3% is "saved" by cutting out the selling broker. when I pick up the phone and call another agent, the first words out of my mouth are "Hello, this is David Goldsmith from DG Neary Realty" - identifying myself as a broker. i have rarely seen an attorney do that (i.e. call on a property and before asking a single question identify that they will be acting as a Broker on any properties discussed). what tends to happen in practice is they just call and use their name (or email or show up at an open house or whatever). they then proceed to pick the agent's brain for info because they need it. then they go behind the agent's back to some property based on information they obtained by not fully disclosing their status and cut them out of any deal. it's essentially theft of services.

so if you are an attorney and want to do this, please go ahead. but act ethically. start every phone call with a broker with the disclosure that they shouldnt talk to you about any property which is not THEIR listing (something every agaent should know when dealing with another agent, as opposed to an unrepresented purchaser). Dont ask about anything else than the property the agent is handling (after all, you are being PAID 3% for your expertise. if you dont have it, you shouldnt be collecting the commision). and dont expect them to provide services which the buyer's broker normally would, like showing the apartment to engineers, architects, appraisers, getting comparable sales for the appraisal, ferrying the contract around to get it signed, dealing with the managing agent/board package, etc.

Hey, someone get 30yrs_RE_20_in_REO a new, updated name.

>it's essentially theft of services.

I have no personal experience with brokers at DG Neary, but I have read postings from two of them on SE. Why do both of them always play victim?

30 yrs, I agree that all parties should act ethically. Now, with the benefit of this ongoing discussion, when the attorney notifies the listing agent of his/her intention to co-broker he/she will not be told that they cannot, that they have to be licensed, that they have to be a member of the MLS or any of the other arguments made above. It is my hope that by virtue of this discussion, attorney buyers will be able to avoid the difficulties I encountered with listing agents who said all of these things. What I have concluded from this discussion is that it may not be that the listing agents were intentionally misleading me and trying to pocket my fee (which is what I believed at the time) but rather that they did not know the law. In either case, I am glad to by out of the market.

30 yrs, I agree that all parties should act ethically. Now, with the benefit of this ongoing discussion, when the attorney notifies the listing agent of his/her intention to co-broker he/she will not be told that they cannot, that they have to be licensed, that they have to be a member of the MLS or any of the other arguments made above. It is my hope that by virtue of this discussion, attorney buyers will be able to avoid the difficulties I encountered with listing agents who said all of these things. What I have concluded from this discussion is that it may not be that the listing agents were intentionally misleading me and trying to pocket my fee (which is what I believed at the time) but rather that they did not know the law. In either case, I am glad to by out of the market.

2right:

1. I stand by my position that attorneys MAY NOT ACT as brokers or collect real estate brokerage
commissions where they are acting as principals, despite the licensing exemption of RPL 442-d,
because from its inception New York decisional law has constantly emphasized that to be entitled
to a commission a broker must be the "procuring cause" of a purchase or lease, and that being a
procuring cause means inducing third parties to make a deal, e.g, Sibbald v. Bethlehem Steel.

2. I also believe that David is correct because failing to disclose the intention to seek a brokerage
commission might violate fraudulent conduct/assertion of a bad faith argument or claim of
Rule 7 of the New York State Code of Professional Responsibility, which applies equally to
attorneys private business transactions, and might also constitute fraud under New York law
under the "special facts" rule of Swersky v. Dreyer & Traud, 219 AD2d 318 (1st Dep't. 199-)

3. David, we met at a bankruptcy court ordered auction where you were swindled out of your
purchase in March 1999: Alison knows the address because I recently gave it to her

Hello rb: I will not argue with you regarding ethics. We agree that professionals should act ethically . However, it is disturbing that anyone would continue to advocate for depriving an attorney of a broker fee to which he/she is entitled by law. It had been my hope that the outcome of this discussion ,which has been ongoing now for several years, would be to educate real estate professionals regarding the law to avoid pointless disagreements in the future. Avoiding litigation is always preferable to succeeding. However, as I noted in a prior post, the attorney may end up having to decide whether to it is worth it to sue for the fee. It most cases, it will be.

In any event, I have enjoyed the conversation. A google search by attorneys wondering whether they may/ should collect their legal commission will likely lead them here. I hope they find my posts helpful. They are not based upon theory or interpretation. Rather, I have utilized this law to collect a 3% fee myself . I have done it twice. Both have involved the purchase of my own residence . I have no intention of serving as an agent for a third party and, as set forth above, am glad to be out of the market.

So then ... when a non-attorney real estate agent buys an apartment for hisself, can he expect to collect a selling agent's commission from the listing agent?

I agree with alanhart/front_porch

just kidding

The ethics are that the apartment belongs to an owner. Broker, lawyer, etc. who is receiving a commission from the proceeds to otherwise be received by the owner, and who provides no value or insufficient value to the owner, is acting unethically.
The only way this "theft of services" BS argument comes into play is if the selling broker is crossing his fingers for an undeserved windfall amount of proceeds from the seller. I'm not surprised though that this whole thread talks about the property owner as if he or she is just a generous but ignorant bystander.

Oh, and I stand by what I said 5 days ago. It's amazing that a brokerage firm can be bitching about ethics but yet expect to receive portions of sale proceeds without providing sufficient value to either the seller or the buyer.

2right:

1. I am not advocating against attorneys
2. merely fairness to real estate brokers

3. being the "procuring cause" of a sale or ease is a condition precedent to
becoming entitled to receive a real estate broker's commission

4. attorneys acting as principles in deal cannot as a matter of law be the
procuring causes of such deals

5. this, in my opinion, they are not entitled to seek or receive real estate
brokers commissions in deals where they act as principals

Wait sorry. If you are member of NY Bar you are automatically a licensed broker? No waive in, no test, no ethics test in particular?

The relevant provisions of the law that benefit brokers only and that are subject of this thread also permit lawyers. As for the ethics test - seriously, you think that lawyers have lower professional requirements? Maybe only for non-lawyers who represent themselves in Ottawa, Ohio Small Claims Court.

Bump? Does anyone come on here anymore?

Waive in by filling out a form and checking a box that says you are an NY attorney. Send Albany a check for $150 and a few weeks later you get a license in the mail. Can choose to be a broker, associate broker, or sales person.

Hello Ottawa. You are correct. NY attorney is a broker with no additional requirements. I encourage you to go directly to NY Real Property Law section 442-f and read it yourself rather than accept any representation to the contrary.

rb345, let me say that I suspect that you are an excellent salesperson. While you are incorrect about the law (I have read the statutes and case law myself), you are, nevertheless, convincing. My hope, however, is that attorneys who turn to this conversation to determine whether they may/ should seek a commission will not be misled. My advice to them would be to go directly to the law for their answer, as I have advised Ottawa.

Ottawa, the bar exam has a relatively extensive ethics portion. I took and passed the real estate licensing course at NYU in 1986. There was an ethics component, but it was slim. My husband, as a licensed attorney, could file and become a broker. He'd suck, but not because of a lack of knowledge regarding ethics. He could, however, sponsor me as an agent, which I've considered.

Well the ethics bit was a joke., but the ethics exam for law is obviously unrelated.Thanks for answers, but contradictory. Ar says you need to file, 2right says no and assigned some homework.

I could be wrong, but I'm good with these things and I'm 99% sure that an attorney just needs to register as a broker, although there are little to no other requirements, maybe a fee.

And no, Ottawa, legal and transactional ethics are just that. If someone truly took to heart the bar exam ethics they'd have more than a good grounding for doing real estate. At least in terms of ethics.

You are good with what exactly?
The other day you decided that jaywalking was a crime. You and Rudy Giuliani.
" I'm 99% sure that an attorney just needs to register as a broker, although there are little to no other requirements, maybe a fee."
It doesn't seem you are 99% sure at all: Are there no requirements, or just "little requirements"? Is there a fee due, or not?

"And no, Ottawa, legal and transactional ethics are just that. If someone truly took to heart the bar exam ethics they'd have more than a good grounding for doing real estate. At least in terms of ethics."

What is the vantage point from which you make these pronouncements? Are you a lawyer? Are you a broker? Are you ethical?

Haven't you stated your contempt for the overwhelming majority of real estate lawyers?

"I took and passed the real estate licensing course at NYU in 1986. "

Well, certainly the world hasn't changed much since 1986. And definitely professional exams and professional associations and regulating bodies that create them haven't evolved much in the 28 years.

"He could, however, sponsor me as an agent, which I've considered."
So why not? Your last accomplishment was in 1986, have you considered doing anything since that time?

Oh, excuse me,you have "considered". Just haven't "done" ... you are still of course "about ready".

http://streeteasy.com/talk/discussion/38247-subsidized-housing-or-should-i-say-lifestyle

So this article - that seems to make sense - suggests that it is a fallacy that attorneys are somehow brokers, but that they can receive a commission.
http://www.wpar.org/main/link_to_file?file_name=March_2011.pdf&file_path=%2Fhome%2Fwpar%2Fwpar%2Flibrary%2Flegal_articles%2Flglart11%2F

Right before this thread was bumped supposedly for insufficiency of correct information, the following comment was made, "The relevant provisions of the law that benefit brokers only and that are subject of this thread also permit lawyers. "

2right:

1. you're overlooking the points I made
2 . the issue isn't one of being licensed

3. it is whether the attorney is the "procuring cause" of a sale
4. that principle is embedded in stone in New York law

5. see e.g., Siddell v. Bethlehem Steel, which was cited and
followed by the First Department in late May

6. to be a procuring cause you have to bring two other parties together
7, an attorney cant do that when acting as a principle

8. I have never seen or heard of a NYS case which allowed an attorney
to collect a commission for and when buying a piece of real estate

Hello Ottawa:

I read the article you attached. It suggests only that the attorney may not serve both as a broker and as the attorney for a party simultaneously. I agrre with this, but this is not what we have been discussing. The discussion has been whether an attorney can serve as a broker and receive his/her commission for doing so. Sorry for the homework assignment. It is just that the law is so clear, that I thought the best advice I could give you would be to read Real Property Law Section 442-f for your self rather than rely upon (some inaccurate) representations of the law as set forth above.

I attempted to read the case cited by rb but cannot locate it. It must not be published. I would be happy to review it if rb would attach a link. As for the case law rb has requested, please see Application of Cianelli, 16 AD2d 352; Weinblatt v Parkway-St. Johns, 135 Misc. 743 as well as Attorney General opinion 108, all of which remain unchallenged good law and hold that an attorney at law is not required to be licensed as a broker in order to act as a real estate broker.

My posts have been consistent and truthful and it is my hope that hey prove helpful. I will again suggest that you read the law yourself to avoid being misled.

2right:

1. looked at Cianelli
2. at it says is that an attorney doesn't need to be licensed to act as a real estate broker

3. it doesn't address the procuring cause point I have made
4. SPRE Realty v. Dienst does

5. it is a May 20th First Department case

>Hello Ottawa:
I read the article you attached. It suggests only that ...

Ottawanyc isn't even qualified to be Canadian, not sure why you are listening to what he says.

rb:

I have intentionally tried to avoid addressing your "straw man" because the underlying question which initiated this conversation was whether an attorney may/ should collect a commission when purchasing a home and whether an attorney must obtain a separate real estate license to do so. As I have stated numerous times above, an attorney may act as a broker and receive a commission without obtaining a real estate license. Whether a broker has sufficient ties to the parties or a particular transaction (is the "procuring cause" to use your term) to entitle the broker to a fee in a particular transaction is not the topic of discussion. Nevertheless, lest anyone be misled by your postings, I will address your (unrelated) points.

As you know, SPRE Realty v Dienst sought to better define when a broker's link to a particular transaction is sufficient to entitle that broker to a commission. It distinguished between the role of a broker sufficient to entitle the broker to a commission from a link between the broker, parties, and transaction which is "indirect and remote," and, therefore, insufficient to warrant payment of a commission. That case does not discuss at all whether an attorney may collect a commission for property purchased by that attorney.

In any event, the law which regulates the payment of commissions to licensed brokers, agents ,etc. is Real Property law Article 12-a. Attorneys are specifically exempted from Article 12-a by Real Property Law Section 442-f. If you can locate a statute or case which holds that an attorney may not collect a broker's commission on the purchase of real property by that attorney, I will read it. However, I have not found anything which says that. In fact, as stated repeatedly by me above, the opposite is true.

By the way, I was able to locate Sibbald v Bethlehem Steel. It would have helped if you had mentioned that it was from 1881 (and predates Real Property Law 442-f). In any event, its holding is similar to SPRE Realty and does not address commissions payable to attorney buyers.

Hopefully, this "sideline" discussion will not prove distracting to a reader interested in the original inquiry: whether an attorney may collect a commission on the purchase of his/ her own home and whether an attorney must obtain a separate broker's license to do so. The answers remain that an attorney MAY collect a commission and a separate broker's license is NOT required.

notright2often:

1. Sibbald was quoted and followed in SPRE, which is less than 40 days old
2. an attorney cannot be a procuring cause o his or her own purchase

3. SPRE and Sibbald are really clear about that
4. an attorney acting as broker must bring 3rd parties to enter into a deal