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Douglas Miller
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I only represent consumers in residential real estate matters.
I only represent consumers in residential real estate matters.

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As part of my legal services, I'm collecting and rebating the entire buy-side real estate commission to my clients. I only charge for legal services which are a fraction the cost of commissions. This is a way to get real estate attorneys back into residential real estate (click here):

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FALSE - Buyer brokers don't cost buyers anything because they get paid by the seller. The truth is that buyer brokers cost buyers a LOT. Why pay a real estate commission? I collect the commission payable to the buyer broker and give the entire amount to my clients. That means my buyer clients save thousands of dollars at every closing and they get the benefit of legal representation. When 80% or more of home buyers find the house they want to buy without a Realtor, why pay for one?

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Few consumers understand how Realtors are paid and especially why they charge so much. In Minnesota, Realtors don’t even need a high school education to get a real estate license and the 60+ hours of required licensing training is all about how to pass the simple exam. Yet most consumers pay them far more than they would pay an attorney to do the same job? Why?

Hire me to help you buy your next house and let me show you how to save most of the buy-side commission. Think 2.7% savings – on a $300,000 house that works out to be $8,100 (less my fees). Or if you’re buying a 5 million dollar house, I might save you well over $125,000. Hiring me will likely save you many thousands of dollars. And you have a real estate attorney drafting your agreement, not a Realtor.

80 – 90% of home buyers find the house they want to buy through their own searches without a Realtor. So if you find your own house, what do you need a Realtor for? Many real estate licensees spend most of their time trying to “hog” deals (where they represent both the buyer and seller and get a double fee). They actually have a huge financial interest in manipulating your best interests. Most agents who claim to be “buyer’s agents” are nothing of the sort. As soon as they show you a listing from their own brokerage firm (any listing from their firm), they and their broker become a dual agent and are legally prohibited from negotiating on your behalf. In other words, “your” Realtor can’t really help you other than to try and draft your purchase agreement per your instructions. They are extremely limited in the advice that they can give you. If you must use a Realtor, use a small firm that is unlikely to see a dual agency situation and hire the broker/owner (they don’t have to split their fees with their agents). Then negotiate a flat fee and big rebate credit from the commission they collect.

Realtors are only allowed to draft purchase agreements when it is ancillary to the real job they are doing. Realtors can help you draft a purchase agreement only if they are providing other important brokerage services to you – like helping you find and negotiate a transaction. They are not lawyers. Not even close. I’ve even heard Realtors tell clients that they pretty much serve as a lawyer. Nothing could be further from the truth.

Wouldn’t you rather have an attorney drafting your purchase agreement? I only represent consumers and I only handle residential real estate. Plus, I’m a Real Property Law Specialist, certified by the Minnesota State Bar Association. I’ve also sat on the Bar Association’s forms committee for many years. I also hold a real estate broker’s license.

What if I credited the buyer brokerage commission to you? What if the only fees you paid for were my legal fees? I’m willing to do that. However, you have to be willing to do some of the house searching yourself. Meet with me and I’ll show you how.

I owned a title company for nearly 20 years and saw thousands of transactions and to this day I still can’t see the value proposition for paying a Realtor to help you buy a house. I saw many transactions that had poorly drafted purchase agreements that were at best voidable and by sheer luck got closed. So why do people pay so much? Unfortunately, there is a massive misinformation campaign to make you think that you need to have a buyer’s broker. In fact, many Realtors go so far as to tell buyers not to worry about the cost because it won’t cost them anything. That’s a lie. And it is told over and over again every day. Just because you don’t see the money coming out of your pocket doesn’t mean they aren’t taking your money.

Realtors have set up an extraordinarily complex fee structure in order to make buyers think that it costs them nothing to work with a Realtor. Consider how difficult they make it for you to negotiate their fee. As a buyer, you pay the seller the purchase price of the home. From those proceeds, the seller then pays their listing broker who then shares their commission with your broker. If you want to negotiate a lower fee, the only way to do is it by having your buyer broker pay you a “rebate.” It doesn’t need to be this complicated.

What do Realtors do? I can tell you what they shouldn’t be doing… They shouldn’t be giving you lending advice – that’s what mortgage officers do. They shouldn’t be appraising houses – that’s what appraisers do. They shouldn’t be inspecting houses – that’s what home inspectors do. They shouldn’t be giving you legal advice – that’s what attorneys do. They shouldn’t be recommending title companies – few of them understand what a title company does and most Realtors have such cozy relationships with title companies that it interferes with the neutrality of the title and closing services. They shouldn’t be attending closing – any advice that you might need at closing likely falls under the category of legal advice and it is illegal for them to give you legal advice. Again, why would you pay them so much when they do so little?

I can only work with a few buyers at a time, so please call me to see if I am available. I love helping consumers save money on real estate commissions and I love educating consumers on the real estate process. Give me a call 612-284-9000 or email me: dougmiller@attorneyre.com.

As the Minnesota home buying season picks up, some advice to home buyers:
* Do not ever agree to dual agency. Use a small brokerage firm that can provide exclusive representation.
* Always negotiate the buyer brokerage commission. Many Realtors will tell you that they work for free. They get paid by the seller but that does not lessen the opportunity to negotiate with them. If you're doing all the work, insist on at least a 50% commission rebate. Yes, it is legal.
* Never work with a large brokerage firm. All of them will expose you to dual agency. Dual agency is an impossible conflict of interest in which you will lose most of the services for which you hired your Realtor.
* Never use your broker's title company. A title company investigates and examines title and makes important title and closing decisions. The last person you want making these decisions is someone who has a large commission riding on the transaction closing.
* Do not sign the Minnesota Association of Realtors representation contract. It includes many terms that only serve the interests of the broker.
* Require your agent to disclose to you the commission being offered in the MLS on any properties you are viewing before you see them. Make sure that disclosure includes any bonuses.
* Home warranties are some of the most complained about products on Angie's List.
* New construction contracts from national builders tend to be some of the most consumer-unfriendly contracts in existence. Do not sign these.

Highly recommend that you look up Consumer Advocates in American Real Estate. It is the only non-profit charity dedicated to consumer protection with the residential real estate industry. It is free and provides substantial resources. And, it is located right here in Minnesota. I'm the Executive Director.

Hope this helps.

Thanks.

At last year's NCLC conference I found it interesting how few consumer lawyers knew anything about the consumer protection issues surrounding the residential brokerage industry. I'd like to start a discussion about some of these issues that often open up causes of actions in related areas like mortgage fraud, mortgage foreclosure etc...

Here are just a few of the issues:
1. Dual Agency. While dual agency has been legalized in an adversarial situation just for Realtors, that does not mean it is right. I have found that most Realtors who engage in any form of dual agency violate the statute and open themselves and their brokers to all kinds of damages for fraud.
2. Unauthorized practice of law. Agents and their brokers are constantly providing bad legal advice about foreclosure, representation, title issues and a lot more.
3. Self-dealing. Both brokers and agents are heavily into steering clients into their own title firms, selling their clients ancillary products like home warranties and more.
4. Undisclosed referral fees between brokerage firms.
5. Pocket listings - Listing brokers who "advise" their clients to keep their properties off the MLS.
6. Standardized fee and representation agreements.

There's more, a lot more. When you think about your distressed home seller client ask yourself who steered that client into the home and what kind of advice or conflicts of interests occurred at that time? Realtors constantly breach their fiduciary duties to their clients. In fact, I call them predatory fiduciaries. I believe this area of law is largely unexplored and provides huge opportunities to legal aid lawyers, class action lawyers and general consumer protection lawyers.

Thoughts?

At last year's NCLC conference I found it interesting how few consumer lawyers knew anything about the consumer protection issues surrounding the residential brokerage industry. I'd like to start a discussion about some of these issues that often open up causes of actions in related areas like mortgage fraud, mortgage foreclosure etc...

Here are just a few of the issues:
1. Dual or Designated (another form of dual agency) Agency. While dual agency has been legalized in an adversarial situation just for Realtors, that does not mean it is right. I have found that most Realtors who engage in any form of dual agency violate the statute and open themselves up to all kinds of damages for fraud.
2. Unauthorized practice of law. Agents and their brokers are constantly providing bad legal advice about foreclosure, representation, title issues and a lot more.
3. Self-dealing. Both brokers and agents are heavily into steering clients into their own title firms, selling their clients ancillary products like home warranties and more.
4. Undisclosed referral fees between brokerage firms.
5. Pocket listings - Listing brokers who "advise" their clients to keep their properties off the MLS.
6. Standardized fee and representation agreements.

There's more, a lot more. When you think about your distressed home seller client ask yourself who steered that client into the home and what kind of advice or conflicts of interests occurred at that time? Realtors constantly breach their fiduciary duties to their clients. In fact, I call them predatory fiduciaries. I believe this area of law is largely unexplored and provides huge opportunities to legal aid lawyers, class action lawyers and general consumer protection lawyers.

Thoughts?

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Are you a Do It Yourself homebuyer? Most home buyers believe that if they find their house themselves that they will be able to negotiate significant savings in real estate commissions. Unfortunately, that is a myth that is perpetuated by the real estate industry. Over 80% of home buyers find the house they want to buy without a Realtor. Yet, nearly all of them end up lining the listing broker's pockets with a commission "hogger" (when the listing broker keeps both parts of the commission).

How would you like to claim 100% of the commission being offered to the buyer broker? How would you like to know how much is being offered to the buyer broker before you buy a house? How would you like having an attorney draft the purchase agreement to buy your next house instead of a Realtor?

I only represent consumers in residential real estate matters and I help clients collect the entire buy-side real estate commission. I hold a broker's license and I refund the entire real estate commission to my clients. If you are buying a home, let's spend a free half hour on the phone so I can explain my process, the costs and help you save a lot of money.

612-284-9000 or email me at dougmiller@attorneyre.com

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Could I owe a commission if my transaction doesn't close?
Yes! The Minnesota Association of Realtor listing contract states that you owe a commission if your broker procures a ready, willing and able buyer. You can change this or use a different form.

Who typically determines the buyer broker's compensation?
It is fixed by the listing broker. It is rarely negotiated by either party to the transaction.

Who should negotiate the buyer broker's compensation?
The buyer. However, brokers go to great lengths to conceal how much is being offered to buyer brokers and misleading inform buyers that they work for "free."

Should consumers sign the realtor arbitration agreement?
No! The realtor arbitration form requires you to use the arbitration firm under contract with them. That could translate into decisions that favor realtors, not you.

Should I agree to dual agency?
No. Dual agency is illegal for every other profession and it creates an insurmountable conflict of interest. Realtors have the added conflict of having a financial incentive of a double fee to steer you into transactions that involve dual agency. Worse, it creates an incentive for agents to discourage cooperating brokers from showing or selling your house. You unnecessarily give up a lot when you agree to dual agency including your agent's negotiation expertise. You can avoid dual agency by finding a highly qualified agent in a small firm.
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