Advice on Attorneys

by Lorelei Stevens

As a buyer of seller financed notes, you should have each transaction examined by a qualified attorney. But who is qualified?

When you look for a lawyer to give counsel on your note deals, the best rule to follow is: Choose an attorney that buys notes with their own money.

I am almost embarrassed to say that it took me many years in the note business to figure this out. Like most note buyers, I had assumed that a good real estate attorney knows all about notes. I was wrong.

Of course, I knew that buying seller financed notes is a specialized field that requires specialized knowledge. But I hadn’t recognized that giving legal advice to those who buy seller financed notes is just as specialized.

By assuming that a good real estate lawyer would know all about note buying, I was putting an unfair burden on the lawyer. Note buying is actually a second cousin to real estate, because it goes beyond the real estate arena into the complexities of the Uniform Commercial Code, and other legal areas such as bankruptcy, usury and securities. Expecting a real estate lawyer to be expert in those other fields is presumptuous.

What finally jolted me into recognition was a story that a lawyer friend told me. She had recently been accepted by a law firm that specialized in real estate. But they would not hire her until she bought a home of her own — she had lived in rental properties all her adult life. Their logic was simple: No client would want a real estate expert who didn’t even own a house!

It hit me that the same thing was especially true about note lawyers. Of course, there are a small number of competent lawyers with long experience in seller financed notes who themselves have never bought one for their own account. But the lawyer who does buy notes is the one for the note buyer to hire.

For one thing, you have a colleague as well as a counsel. The note buying attorney has had the same problems you have and has faced the same risks. That common bond gives you a foundation of shared experience, a reality factor you don’t need to explain. That saves you time and money.

How do you find such a lawyer? There are several approaches to try.

Check with the local bar association, which may publish indexes of attorneys listed by specialties.

There is also the publication called “Martindale – Hubble Law Directory,” a lawyer locator with a rating system devised by the attorneys themselves. It lists the specialties of the law firms and attorneys in your area. This should narrow your search so that a few telephone calls can find that lawyer with personal experience buying notes.

Another approach is to look in your local newspaper’s classified section to find institutions that buy or broker notes, or in the telephone directory for title insurance companies. Both usually have staff attorneys with good knowledge and contacts. You probably can’t hire these attorneys, but you can ask them if they can recommend good attorneys who buy notes.

Once you have the field narrowed down, call the attorneys on your list and ask if they have ever bought seller financed notes with their own money. Make sure you emphasize that last part about “their own money.”

When you find one who says “yes,” explain that you have a note transaction that needs review. Ask a few basic questions about the lawyer’s services and fees. If you get satisfactory answers, you have most likely found an attorney you can work with.

WALL STREET BROKERS, INC.

Copyright ALL RIGHTS RESERVED

Lorelei Stevens is the President of Wall Street Brokers, Inc. in Seattle. She has been buying notes for 27 years and would love to buy some notes from you. Please contact her at (phone): 206-448-1160 (Fax): 206-448-8476 E-mail: lorelei@eskimo.com. VISIT HER WEBSITE: www.wallstreetbrokers.com

Lorelei is the author of “LORELEI’S LEGAL LESSONS, THE ESSENTIAL GUIDE FOR SUCCESSFUL NOTE BROKERS. learn the little-known rules and requirements that can make or break you, written in a clear, concise and easy to understand style. For information, click here.

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