Vol. 10, No. 6, Pg. 32. Where are We Going? The Direction of Residential Real Estate Closings.

• Author: By C. Joseph Roof

South Carolina Lawyer

1999.

Vol. 10, No. 6, Pg. 32.

Where are We Going? The Direction of Residential Real Estate Closings

32Where are We Going? The Direction of Residential Real Estate ClosingsBy C. Joseph RoofThe Broadway musical Paint Your Wagon opens with gold prospectors singing:

Where are we going? I don't know. When will we get there? I'm not certain. All I know is we are on our way.

The direction of residential real estate may be more uncertain than that of the prospectors, but we are definitely "on our way,"

34The nation's most recent period of prosperity has strained the productivity of most South Carolina law firms engaged in the residential real estate practice. Lenders and developers are unofficially challenging the role of the closing attorney in these transactions. These protests are sometimes displayed in open defiance of the holding in State v. Buyers Service Co., 292 S.C. 426,357 S.E.2d 15 (1987), in which the South Carolina Supreme Court held that preparation of real estate documents and involvement in real estate closings by a commercial title company constituted the unauthorized practice of law.

More frequently, however, lenders and developers exert pressure by competitive packaging, with bids being sought from real estate attorneys to play a minimum role in the transaction for a minimum fee. Under the burden of ethical constraints, lawyers cannot compete with those determined to perform phases of the transaction for fees much less than lawyers can economically charge.

A recent reminder by the Office of the South Carolina Attorney General that Buyers Service remains the law of this state is likely to go unnoticed by those who are determined to offer package deals to customers buying and financing homes. (See 1995 WL 810368.) Like the inchworm "measuring the marigolds," these transactions are creeping away from lawyer involvement. During this transition, lawyers relying on residential real estate are in an awkward and unenviable position.

It is important to note that the principles of Buyers Service are not limited in their application to real estate transactions. Although the holding of the case specifically deals with the preparation of real estate instruments, logic demands that it extends to the preparation of other documents that require the special skills of a lawyer. Potential economic and...