It is similar to the Scotland approach, where at least 60% more of the real estate are being marketed and sold by lawyers. The new model will change and offer alternatives to the traditional model; making the process of marketing/selling more consumers orientated, transparent and legally protected as follows: –
1. The Act does not allow lawyers to charge a commission based on the value of the property, so the fee lawyers will charge to clients will be substantially cheaper. It eliminates the usual grievance against the real estate agents charging huge commission even selling the property within a very short period of time. the Act simply promotes a much better consumers protection.
2. The lawyers will assume the role of legal risk manager from the very beginning so any legal issues will be identified and dealt with. Hence, potential purchasers will not be scared away due to unattended legal or compliance issues. This benefit becomes more obvious and valuable when it comes to commercial properties selling and businesses brokerage, which unavoidably involves a lot of legal documents like leases, franchise agreements, assignment, GST/Tax issues. Traditionally, agents or business brokers would seek advice from the vendor’s lawyer. However, when things go wrong, the whole matter has to be referred back to the lawyer. Hence, it would put the vendor in a much better and advantageous position if the lawyer deals with the marketing/sale/legal transaction from the beginning. The purchaser will be better protected as well. The lawyer will not be able to act for the purchaser as there will be a conflict of interest. Before they sign the agreement, the purchaser will be asked to consult their lawyer to get independent legal advice. In the case of agent, it always ends up with an unfortunate position that the agent would be advising both parties as there is simply no choice for the agent. We have always heard from our purchaser clients that the agents were treating them well and protecting their interest. It is clearly a fundamental conflict and legal flaw in the traditional real estate single represented agency system.
3. The coming era of internet and social media provides tremendous and revolutionary change of ways of marketing and selling. The traditional suitcase business of agents had long gone. It is a new trend and convenient to purchasers surfing the internet, downloading information at their fingertips at anytime and anywhere over the world. It creates simply a new environment and platform for marketing/selling in a more vibrant way.
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