In a previous column, I described a situation where a young couple allowed themselves to be swept along in the emotion of buying a farm to the extent that they ignored their lawyer’s advice to secure an access easement before closing. They made the wrong decision, to their detriment.
But when might it make sense to ignore the advice of professionals you’ve hired to advise you?
No one-size-fits-all answer exists. Those of us with a few years etched into our faces have encountered lawyers, doctors, consultants, brokers, agents, engineers, surveyors and others who have given us wrong advice. Most of the time we get reasonably good advice from those we hire. Sometimes, you get both types from the same person.
Here are a few situations where I would follow my own lights.
1. When the professional’s self interest, not the client’s, seems to be driving the advice.
Twenty years ago, I asked a roofer to come by to fix a small hole in a standing-seam metal roof that was 80 years old. He advised replacing the whole roof. I told him to fix the hole—a $100 job, rather than a $2,500 new roof. The patch is still good. I learned, subsequently, that he routinely urged full replacements whether or not circumstances required them. He would make more money on a new roof, which was the source of his advice. This is true for many trades and professions–mechanics, builders, doctors, piano tuners, among others.
As a property buyer, I once sat in the office of my lawyer while he advised me to go ahead with a purchase that had no deeded access. “You have it by prescription,” he counseled. Maybe, maybe not, I thought. No judge had established the seller’s right to access by prescription in a court case. Whether the seller’s claim to prescriptive use met all of the state’s tests was undetermined. What was not ambiguous, however, was the likelihood of an expensive lawsuit that may or may not have succeeded. I rejected the lawyer’s advice and never used him again.
I have had real-estate agents, presumably representing my interests in a purchase, cheerlead for me to buy, despite many yellow flags and occasional red ones. Sometimes they would subtly minimize negatives and focus on positives. Other times it’s been blatant go-for-it with the idea that all problems can be worked out after closing, at my expense.
2. When the professional’s advice seems to be founded in a conflict of interest.
A lawyer who proposes to represent both sides at closing is worth examining even though this arrangement works well in certain circumstances. It’s not a format for most purchases in my opinion. I recall how furious I was many years ago when I showed up for a closing only to discover that “my” lawyer was also representing the seller.
Similarly, dual agency — when a broker/agent represents both buyer and seller — can involve not playing square with one side or the other. I’ve seen dual agents work primarily for the deal (their commission), even though it was not in the best interest of one or both parties.
I’ve seen examples where local professionals involved in a land deal have had pre-existing relationships with either the seller or the buyer, usually the former. These can involve prior work (or anticipated future work), friendship, membership in the same club or church, or kinship. I’m not sure that disclosure of such relationships (or conflicts of interest) is sufficient protection, but it’s a start.
Finally, I’ve seen brokers either encourage a sale or discourage a particular buyer, because they owned property adjacent to the subject real estate that would either benefit or not.
3. When the professional’s counsel doesn’t make sense–analytically, tactically or strategically.
This is not a matter of substituting your gut feelings for paid professional advice. Each of us has to be honest with ourselves about what it is that we know (which is different from beliefs, hunches and dice-rolling), don’t know, can’t learn in time or lack the context and experience for understanding. But it’s possible that your knowledge is superior to the person you’ve hired on some things but not all things.
Take, for instance, stock picking. Even a schnook like me occasionally has a hunch about a stock, and it goes up. Hunches should not override the advice of a financial analyst who knows a company, its industry, the trends and the pitfalls. Stock-pickers make mistakes and wrong judgments, but their methods over time and over many stock decisions should prove to have better outcomes than my notions. I don’t play the market, and I don’t play hunches on stocks. (The last word on intuitive stock-picking must belong to Mr. Madoff, who, when asked by SEC investigators in 2006 to explain his success, said: “Some people [like me] feel the market.” He failed to add that the market he felt was that of his investors, not the DJIA.)
When I’ve disagreed with a professional’s advice, I’ve talked it through with that individual. Over the years, I’ve come to know those parts of my judgment that have proven to be reliable and those that have been less so. If you’re young and inexperienced, bring in some helpers who have relevant experience.
Remember that your goal is to solve the real-estate problem. You want to make the best choice. You want more options on your table rather than fewer. Your discussion with your advisor is not a personal tussle. It’s simply a matter of making the best decision you can in the circumstances with the information available to you at that time. If you disagree with your advisor, don’t personalize it. Keep the discussion on a business basis. If you find that you distrust the advice you’re getting more and more often, get a new advisor.
I’ve often found that getting more information swings a decision one way or the other. If your advisor objects to more investigation or a second opinion, find another.
I think you should listen to your gut when you feel doubts about your direction or cornered by the circumstances of your deal. Then, it’s time to stop, reassess, get more information, change direction, go forward or turn around. Professionals can help in a focused rethinking. Whenever you feel that your professional is advocating too hard for a particular position or refusing to give you direction when you ask for it, it’s time to reevaluate and find someone else.
If a piece of advice fails to convince me, I get a second opinion, or even a third.
I’ve also come to listen for excessive qualifications on advice, which may or may not be voiced explicitly. No one has a crystal ball, but if I sense too many “generally speakings” or “typicallys,” I get the sense that my advisor is not sure of his counsel.
When all is said and done, each of us is responsible for what we do and don’t do.
Don’t follow professional advice blindly, but don’t override it for the wrong reasons.
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