FULL TRANSCRIPT – SEASON 2, EPISODE 71
Welcome to another episode of the exEXPERTS’ Divorce etc… podcast, where we give you all kinds of information and tips on everything divorce. Why? We’ve lived it, so we get it. We’re Jessica and T.H. And keep in mind you can get exEXPERTS in your inbox by signing up for our newsletter. Get the latest news and find out all about our events before anyone else, plus, access to special discounts and prices. Head to exEXPERTS.com to subscribe.
Jessica: We’re so excited for this episode of the podcast to have back with us again, Jill Sodafsky, real estate attorney here in New York, and full disclosure, my real estate attorney. She is amazing. Today she’s going to talk to us all about how to cover your ass when it comes to basically first-time home buying and the kinds of questions that everybody needs to know because you could very well be finding yourself in a position now after dealing with your divorce, that you are finding your housing situation and navigating that process on your own. So Jill, welcome back. Thank you so much for being here.
T.H.: Welcome, Jill.
Jill: Thanks. It was so much fun last time. You couldn’t keep me away.
Jessica: Well, glad to hear it! So I feel like there’s so much good stuff to talk about this time, but we always have to start with where does someone begin? Because for someone who knows nothing about real estate and wants to get started, where do they start since different states have different laws? You might need a lawyer, or you might not need a lawyer. Do you need a lawyer anyway? Where do we go?
Jill: I think that a site like yours is actually a great first step to try to use people in your neck of the woods who are going through the same thing that you’re about to embark on, to give a little bit of guidance, and a leg up to get started. I think it’s never a bad idea, word of mouth, and talk to people who have gone through the process of just recently purchasing or selling. Is their attorney memorable? Is it someone whose name they remember? I just had a client call me today and say that he asked a bunch of his friends and they couldn’t remember who the person was they used. Then his agent was like, I just used Jill, she was fantastic, call her. And so he was really excited, but that’s what you have to do. You have to utilize the people around you to get started. Always get a few options, right? It’s just like a doctor. You always want to make sure that you talk to a few people. Some people are going to be meshing really well with you, you’ll vibe with their energy, their personality, and some people won’t. Some people have a preference for a man or a woman that they want to work with. Some just feel more comfortable with one over the other. I would say that it’s really important to put together a good team because the bottom line is you’re not supposed to know what you’re doing. I have clients that will call me and say as a preface to the conversation, well, I did some research and I looked online, to try to make me think that they’re not dumb. And I say, you’re not supposed to know this stuff. That’s my job. You want the person who represents you to know all that stuff. My job is to take away your headache and make the experience as streamlined and as enjoyable as possible, and not scary, but you’re not supposed to know that stuff. You have to put together your team, and so you find that one core person, depending on the state like you said, whether it’s an attorney or the real estate agent or your mortgage person, you’re going to have one person that you start with that you’re really comfortable with. Then you build off from that. If you don’t have anybody that you’ve worked with in the past in this arena and you find a kick-ass real estate attorney that you like and that you trust, ask them who would you recommend. Do I need a real estate agent? Sometimes as a buyer, I always say get your own agent, by the way, because the buyers don’t pay the real estate agents commission, the sellers do. There’s no reason under the sun why you shouldn’t have somebody that’s specifically there to protect you, to protect your rights, to look out for your best interest, and to defend you. Because sometimes when you work with, and I know my real estate agent friends are going to kill me for saying this, but sometimes when you work with an agent who reps the seller and you’re the buyer, they’re financially motivated to get you to stay without representation of your own because the real estate agent would get that dual commission, which is a lot more money. They might try to sweeten the pot by saying I’ll kick in a little bit back to you from what I get to make it so that we both can prosper from this, which is completely legal by the way. It is enticing to some buyers because they can save a little bit of money off the sticker price, but you have to remember, number one, you get what you pay for, right? And number two, it’s going to be a little bit uncomfortable. We always want a transaction to go super smooth and for everyone to be best friends. Everyone should be excited about it and on the same page, but the truth of the matter is we’re all differently motivated even though we want the same end result. So the concern is that what if it gets to a sticky point where it’s a little bit uncomfortable and you need to be a little bit more aggressive with someone you haven’t been aggressive with before? Now you have somebody to step in and do that, who doesn’t care about what the other person thinks of them. Their job is to protect you, the buyer. These are things to keep in mind. Word of mouth is a great start. A site like yours is a great start. Finding that one key person and building off from that and just surround yourself with good people that you connect with, that you feel safe with, and who can guide you through the rest of the process. Your job is done in essence when you put together that team and then you just let them take you the rest of the way. Just like when I worked with you, Jessica, sorry T.H… I just wanted to say that when Jessica and I first started working together, I said to her, listen, at the end of the day she’s like, what do you need from me? I’m like, quite frankly just do what I tell you to do and we’ll be good. That’s what happened, and it works.
Jessica: I like it when she just tells me what to do and what she needs. I’m like, okay!
T.H.: Well, because you’re a good listener.
Jessica: And when you have that level of trust with who you’re dealing with.
T.H.: Right. 100%. That leads into my question. First of all, why would I hire a real estate lawyer again? Can you explain that to me? What are you protecting me from exactly?
Jill: Sure. For starters, not every state has a real estate attorney requirement. I actually don’t know, like in California, my job doesn’t even exist. I’m licensed in California, so that would maybe be a little problematic if I moved out there. I don’t actually know if you’re even allowed to have one. I know that you don’t need one in California because the agent takes on that role, but California is very different. New York is its own entity, right? It’s like no other place in the whole country. In New York, you need a real estate attorney 100%. Even if the opportunity comes up, by the way, to share an attorney with somebody else, you never want to do that. There are times when I’ve been called and someone has said I really like working with you. I told the other side because it’s a family friend who’s buying it from me or who I’m selling it to, that you’re great and they just want to use you. We think it’ll be easier and faster. I say you can’t. It’s just I’m too biased. Even if you get something in writing, the only time that can be okay is if it’s an actual family member and you get something signed in writing saying that everyone understands that issues can arise, but I would never recommend it.
T.H.: It’s too muddy. It muddies the water.
Jill: 100%. Yeah, and what you’re talking about in terms of what to be protected against, there’s just kind of that invisible monster under the bed. It’s just that there are things you’re not going to understand, and you’re not supposed to. I’ll also tell you for the attorneys that are out there listening, just because you’re an attorney doesn’t mean you know real estate law. Just like I would never go and try to represent myself in federal litigation in a federal courthouse, you shouldn’t be representing yourself if the area of law you practice is not one and the same with real estate law. It will elongate the process, it will cause more problems than it’s worth if you don’t understand the types of contracts you’re looking at. Just because you know contracts, it’s not the same. They don’t travel over those legal lines. It’s always better to have somebody who knows what they’re looking for to protect you because although it might look super simple and very benign, the problems aren’t with the contract that’s drafted, the problems are the ‘what ifs’ that can happen down the line. Those little words that didn’t mean anything before now come into play and the parties are trying to parse through and figure out what the problems are.
T.H.: So when you’re talking about a contract, you’re talking about the contract to purchase the home?
Jill: Correct. It’s a residential contract of sale for a condo, co-op, or a house, specifically for me in New York City.
T.H.: Okay. Okay, so you’re looking at the contract, so I’m coming to buy a house. The real estate broker gives me a contract to close the deal on the sale, [No] take me through this process so I know what to expect. I put in an offer, I got the house.
Jill: Okay, so you get an offer and it gets accepted. It’s great if you already have your attorney lined up and if you already have your team that you can hit the ground running with already in place. It’s the seller’s attorney’s role in New York City to draft the contract, which typically is a template form with specifics that are filled in based on what’s called a deal sheet that’s provided from the agents that work for the buyer and the seller.
T.H.: Hold on. So this is a big team? You have a selling agent, you have a buying agent, and I would have you as my lawyer, and then potentially the seller also?
Jill: Well, they’re not your team. It’s not your team. Your team only –
T.H.: So who’s my team?
Jessica: Your team is only – I know this, and I can say as a lay person for people listening, if you’re the buyer, the broker who’s the listing agent for the property you’re looking at, they’re not your person. They’re the seller’s person, legally, by the way. Jill’s point earlier of it’s worth it for you to bring in your own buyer’s broker because you’re not paying any commission. It’s always the seller that’s paying the commission. So if you come in with your own broker, that person is going to help you negotiate the best price. The house could be listed for $100,000 and the seller’s broker is telling you what a great deal that is because they represent the seller. But if you have your own broker, your own broker may say to you, yeah, that’s fine, but we can get it for $90,000. You need someone who’s on your side to be looking out for your best interests. But with regard to a lawyer, it’s the same thing. Just like you would want to have your own divorce lawyer, you want to have your own real estate lawyer. You don’t want to be using whoever the seller’s using because again, you want it to be someone who’s looking out for your best interest. I just want to bring up a quick personal anecdote, which is in a deal that Jill and I were doing and I was selling an apartment. In New York City, the way it works out is your lighting fixtures are included with the sale of the property unless you specify otherwise in advance. I’d had a casual conversation with the buyer and their agent previously, and they had assured me that they did not want or need any of the lighting fixtures, but I didn’t know where we were going yet, so I didn’t write into the contract, which specific fixtures I wanted. I was pretty comfortable with the idea that once I knew where we were going, I could go back and say okay, these are the ones I wanted. In fact, when I went back and said these are the ones I wanted, I was told at that point by the buyers and their attorney and their broker that I as the seller had not written it into the contract and now I was no longer entitled to any of the lighting fixtures unless I wanted to buy them back from the buyer of my own apartment. And so that was a situation where Jill was able to talk me off the ledge, because your gut instinct is like, up yours! I’m not doing this. And Jill, you want a lawyer who’s going to be like, let’s look at the bigger picture, how much did the lighting fixtures cost you? How much are they going to cost you to replace? This is where we are with it, let me try to go back to their lawyer, and let me try to negotiate this point for you because you’re all in a huff. So it’s important to have people on your side that are going to be able to see through the fog and steam and be able to help you handle it in a reasonable manner when you’re all bent out of shape or things.
T.H.: Right. So a lawyer has no emotional connection, the same thing with divorce, so whoever you are hiring is keeping you even. I go, I buy the house, and I have a broker representing me as I come to buy my new home.
Jessica: You should. You should.
T.H.: And then the next step is I hire Jill to renew the contract because the broker doesn’t necessarily have the right skill set.
Jessica: In some places that’s true.
Jill: In some places that’s true.
Jessica: And the other thing is with freestanding houses that you’re buying in any other state, there’s always going to be some kind of inspection process. You need a lawyer like Jill who’s going to be able to say to you this is what standard practice is in terms of the inspection, this is what’s allowable, this is what’s okay, and this is what makes me uncomfortable.
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Jill: Jessica, let me also just jump in with what you just said there. This is very interesting, because I work with a lot of buyers that are coming from other states, and in other states, obviously, it’s very different. I have clients that I just got into contract with that were from Pennsylvania. I believe in Pennsylvania you actually have a certain amount of time after you get into contract to do your inspection period. If things just aren’t up to snuff, basically, and it’s a reasonable reaction, then you can basically get out of that contract because of those items. I went through an entire process with my clients. Also to your point Jessica, where you had said that you need an attorney that can remain level-headed, and also like T.H. was saying be not really emotionally invested, you also want clients that can hear what you’re saying. Sometimes, especially if you’ve got clients coming through this site, where you’ve had a really emotional kind of upheaval recently, it’s hard sometimes to hear what people are saying because there’s so much else going on with you. But it’s really important that if you do put together your team that you are able to stand back and listen to what they say. My clients were not in a place to hear me. I was explaining about the whole inspection process and how you as a buyer, the most say you have is pre-contract. Once you’re in contract, there’s literally no opportunity to go and change it because the seller has no incentive at that point. Why would they? They’re already locked into a contract with you. Why in the world would they want to change something and give you money back on something that you didn’t plan ahead for? So we got through the entire contract process, and then at the 11th hour, I again said, because of the question she was asking, are you sure you don’t want to have an inspection done? And at that point, she heard me for the first time. She said, well, what do you mean? We just do the inspection after we’re in contract. I was like, no, that’s not how it works. Unfortunately, although it did delay things dramatically, fortunately for her, we were able to get her in with an inspection person, an engineer of sorts, to check out those things.
T.H.: So when you come into the picture, does my broker basically step out of the picture?
Jill: No, so that’s why it’s a team. They’re working off of each other. This is how it happens. Your agent says, typically for me, because even though I get a lot of referrals, a lot of my deals are from agents that I’ve worked with in the past that keep sending me clients to talk to and see if they’re comfortable working with me. I get a referral of a client, I talk to them, and we decide we want to work together because it’s a two-way street. I might talk to the client and realize I’m not the right fit for them. I might feel from that conversation that I’m not the best one for them. Let’s say we decide we want to work together. At that point, the agent submits the deal sheet. Then the agent is not done with their job. The agent is on standby waiting for me to go over the contract. Then I tell the client, look, it’s time to schedule your inspection. Usually, the agents have already told them that and they might even have already scheduled it before they come to me. The agent is going to be there with them going through the inspection with them, telling me what items came from the inspection that they want to insert in the contract. Maybe an outlet didn’t work, maybe there’s termite damage, whatever it is, and then those items now need to be worked out. It’s great if you’re working with an agent and an attorney who have a relationship because I talk to my agents all the time and they’re very open and communicative. Sometimes attorneys don’t like to talk to agents, so you need to find one that can because it’s only cutting off your nose to spite your face if you’ve got team members that aren’t really talking to each other. Once those items are addressed and that inspection is done, now I’m reviewing all that due diligence with my clients whether it’s a condo, co-op, or house. I’m going over everything with them, getting them to a point where they’re going to wire the money, in COVID we’re wiring now, we’re not really sending checks, and sign a contract which can be done electronically. I rarely meet my clients these days. I talk to them on the phone a ton, but I rarely meet them. They sign a contract, we send it over to the seller, and the seller’s attorney then gets the sellers to go over it to sign and sends it back to me. We’re now officially in contract. At that point, if my buyers are all cash, then we would just proceed depending on whether or not they’re buying a condo or co-op, or a house with any board package or whatever else they need to do. There are specific steps and rules relating to those and timelines depending on what the property is you’re buying. But if you’re buying with financing with a mortgage which most of my clients are doing, then the next step is for me to give the bank the contract. The client, the buyer, is going to give me their contact info. If I can just sidestep for a second when you’re talking about mortgages, I do want to make a note, it is super important to try to use a mortgage person in the state in which you’re buying the property. I have a lot of clients that will call me coming from California, I’m using that as an example, and they’re buying a property in New York, but they want to use their mortgage guy or gal from California because they’re going to save a couple of hundred dollars. They’re willing to give them some sort of discount. The problem is that let’s say hypothetically you’re buying a co-op in the city, California people don’t know what a co-op is. I can’t even tell you how many times I’ve spent hours on the phone with bankers in California trying to explain to them what a co-op is and what they can and can’t get from management. It’s exhausting. It’s delaying the transaction.
T.H.: A waste of time and money.
Jill: Yeah, it’s going to cost you more money than you can ‘save’. Ask your team, who do you recommend? Talk to a few people. It’s also important to know, by the way, this actually came up today in another conversation for me, as an attorney I do not get kickbacks. I don’t get a kickback from using a title company. I don’t get a kickback from going with an attorney or an agent on the other side. I do not get kickbacks. If your attorney gets kickbacks, that is the wrong attorney for you to use. It is not legal. I am not financially invested in anybody that I choose to connect you with. I am emotionally invested in those people because it will make all of our lives easier if we have people that know what they’re doing and can walk us through and who are really good at their jobs, but that’s as invested as I get.
T.H.: That’s great. That’s really important because if it were me I would think it’s just wherever. Your credit is your credit.
Jessica: It just goes to the point, I think with anything in life, if you’re working on some kind of project, maybe you own your house, and you’re going to be renovating, you need an architect, and then you need a contractor, and then you need your interior designer, you’re going to be better off if all of those three people and their teams can all work together cohesively. So getting recommendations from your friends to start your process is totally important and valid. But once you choose your main person, it might really benefit you more to then take some of their recommendations from people that they’ve already worked with and know that they can get the information that they need. One of the things that’s been great, I feel like this is like a plug for Jill’s business, but one of the things that I’ve loved on the deals that I’ve worked on, honestly, it’s like, I don’t have to worry about whether or not she’s taking care of her end of the deal. You know what I mean? We had actually a problem recently with something with a co-op from the deal sheet not translating correctly into the contract. It then dominoes into the bank needs to know and other paperwork needs to be changed. I literally didn’t even have to give two thoughts to that because Jill was like 10 steps ahead emailing the other attorney with me CC’d saying here’s what we’re going to do, and then I need this to be able to send to the bank. You need people on your team that you can rely on and that they know that they can rely on.
T.H.: Right. Awesome. I mean, I learned a lot.
Jessica: I will say, as someone who’s not on the legal side of things but on the personal side of things, I’ve been involved with dozens and dozens and dozens of real estate transactions as the buyer and the seller. There is a lot to know, but this is why it’s such a great conversation for anyone who really is coming out of a marriage and getting divorced and having to navigate this process solo. It’s very scary. The idea and what I really was hoping, which I do think we kind of got out of this conversation, was you can find someone who can help you really make it not that scary. If you find a real estate attorney who is making you feel like you’re asking too many questions, or that you should know more than what you know, or that you’re wasting their time, I promise you that’s not the lawyer for you. You need someone who’s going to be willing to take the time to hold your hand if you need it and walk you through the process because that’s the only way you’re assured to know that you’re covered in every circumstance.
Jill: You need an attorney, quite frankly, that’s going to look at you as if they’re standing in your shoes as the buyer. I’m super transparent with my clients, but I also feel like what if I was in their shoes with the questions that they’re asking? That’s how I can engage because I am high anxiety, and I do pay crazy attention to detail, and so I can sense that from my clients. Sometimes there’s a reason that attorneys are also called counselors, right, because we’re there for our clients emotionally, not just for the transaction. I can sense when my clients are stressed out if they’re anxious, or they’re nervous, or they’re feeling pushed around or rushed. I am not financially invested in the outcome of a transaction, because I get paid, which I can talk to more with my clients, but I have a dead deal fee. If my deal doesn’t die, there’s a certain amount that I get paid, specifically to avoid situations in which I’m so financially invested that I want to force the sale to go forward. So for me, at the end of the day, if I’m getting paid regardless, one fee or another, I just want you to be happy. I don’t care what the outcome is. As long as it’s the outcome you want, I’m good.
T.H.: Right. I would say that from what you’re both saying, it just reminds me of the reasons why you got a divorce, right? You don’t want to get into a new relationship with someone you’re paying who makes you feel like the person you just divorced made you feel. Get rid of that feeling in your life and find someone who doesn’t. All the stuff you’re saying, that sounds like another time. So just move forward, find someone you trust, find someone recommended, and work with their team.
Jessica: So on that note, Jill, for people who want to reach out to you directly and get more information, I mean, look, everyone needs to know that Jill’s licensed in New York and California, so if you are buying property in Connecticut, she’s not the girl for you.
T.H.: New York state or New York City?
Jill: New York state.
Jessica: So for anyone who wants to reach out to you directly and get any advice or ask any questions, what are the best ways for them to find you?
Jill: They can check out my website which is www.sodafskylaw.com or they can email me or phone me, which are the actual two best ways, which is firstname.lastname@example.org or my phone (646) 872-0553. I just want to say one last thing, even when you put together a good team, it’s important to understand, and I learned this the first year I was doing real estate law, is that you’re never done with the transaction or a client when the deal is terminated. You’re just not. You’re always going to have your clients, hopefully, reaching out to you and I like to be a one-stop shop for my people. If you ever do have a question about something or you need guidance and you felt a connection with me through this or you looked at my site and you felt like I might be a good source of information, you can always reach out even if I don’t end up representing you. I can certainly put you in touch with someone or give you some ideas as to where to get started so that it’s a little bit less overwhelming.
Jessica: That’s amazing, and that’s why we love you! Amazing. Thank you so much, Jill.
Jill: Thanks for having me.
Jessica: There’s always more to talk about, but for today, I think that was a great amount of information and so helpful. Thank you so much for being with us again.
Jill: Well, thank you, it’s always a pleasure.
T.H.: Thank you.
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