The Bank’s Attorney Is The Bank’s Attorney—Not Yours

Posted in on August 2, 2017

When you have decided to purchase a home in Massachusetts, you have undoubtedly made a life-altering expensive decision. Once the offer to purchase has been accepted by the seller, the first question your broker will likely ask you is whether you intend to hire your own attorney to assist and guide you through the next steps or whether you intend on settling with the attorney the bank will select to represent it with the financing.

Of course, this is not an easy decision. Cost is always a consideration. Frankly, if your financing is locked in, your lender will already have selected the bank attorney and he/she will gladly offer you the opportunity to “piggy back” the bank’s representation by using the same lawyer. Often this service is offered at a significantly reduced fee. Makes perfect sense, right? Not always.

While most residential real estate transactions proceed to a closing very smoothly– some do not–and it’s in those rare occasions you will wish you had an attorney representing you. For example, what if the seller had agreed to leave all of the appliances and furniture with the home, and when you did your final walk-through of the property in advance of closing they were not there. This has happened. Will the “bank attorney” help you through this situation and ensure that you receive appropriate credit or other compensation for this? Probably not, as the bank attorney’s alliance is to his or her primary client, the bank. You will be on your own in negotiating a resolution in this scenario.

What if, between the time of your inspection and closing, the roof has developed significant leaks or there has been other damage to the home? The bank’s attorney will not want to get involved with this on your behalf because, again, his or her alliance is to his or her primary client, the bank, and the significantly reduced fee offered to you at the outset, does not cover extended negotiation of disputes with the seller. Lastly, what if midstream, the seller has decided that he no longer wants to sell you the property, despite being under contractual obligation to do so? Will the bank’s lawyer protect you in this situation? It is very unlikely. He or she will probably cancel the closing and move on to the next bank transaction and leave you hanging without effective representation to deal with this.

Of course, having effective, competent, legal representation is more expensive than “piggy backing” on the bank’s lawyer, however, the added cost (on what is arguably the most expensive purchase you will ever make in your lifetime) is well worth it–especially, if something unfortunately goes wrong. And when it does, you can comfortably and confidently say, talk to my lawyer—she’s dealing with it.

At Baker, Braverman & Barbadoro, P.C. we have experienced real estate attorneys that can assist you from offer to closing, and in the event that you used a bank attorney and find yourself with an issue, our litigation attorneys are prepared to step in to protect your interests. –Gary M. Hogan.