Real estate is a great equalizer. Everyone needs to rent or buy a home. Businesses need to rent or buy an office. Retailers need to rent or buy a store. The simple fact is that real estate touches all aspects of our lives. Consider that almost six million homes were sold in 2018 alone, not counting commercial properties or rentals. Put another way – the scope of the real estate industry is massive. This means legal disputes over property are similarly massive and often expensive. Real estate mediation offers an alternative to home buyers and sellers alike. Here’s what you need to know about the real estate mediation process. 

What is Real Estate Mediation?

There are countless chances for conflict during any type of property transaction. Perhaps a seller doesn’t make the proper disclosures, or a title search reveals a lean on your new home. Maybe a listing agent doesn’t receive their listing fee, or business partners dissolve their partnership while in escrow for a new office. Whatever the case – and there are many – the real estate mediation process is largely the same. 

Mediation begins when all parties involved bring in a third-party mediator. Your mediator is neutral and facilitates communication, understanding, and collaboration between you and the other individuals or businesses. Real estate mediators are often attorneys, former judges, or otherwise experienced legal professionals. The National Association of REALTORS®, as well as state and local associations, have mediators on staff for their members and the clients their members represent. 

The real estate mediation process consists of communication and negotiation between involved parties. It is confidential, which means that all verbal and written communication is private and only seen by those involved. This helps lead to the parties working together to achieve a favorable and mutually agreed upon outcome. 

Mediation is less expensive and more efficient than litigation. Not only is there no need for multiple attorneys, paralegals, and other legal professionals, but the process of working together with the other parties often leads to a quicker conclusion. When faced with months or years in court or days or weeks in mediation, most people opt for mediation. 

Now that we have looked at the real estate mediation process, it is time to look at the differences between real estate arbitration and mediation. 

Real Estate Arbitration vs. Mediation

Although they share a number of similarities, real estate arbitration and mediation are noticeably different. The largest difference is that while mediation is a collaborative process (all parties working together towards a common solution), real estate arbitration is an adversarial process. This means that those involved argue their cases before an arbitrator, who then deliberates and decides on the outcome. 

Both mediation and arbitration use neutral third parties. Mediators do not have control over the final decision, though, while arbitrators do. Arbitration decisions can be appealed, but this is often a fruitless pursuit. You must enter into an agreement to arbitrate before the process begins. Oftentimes, the agreement states that the arbitrator’s final decision is binding (it must be followed). 

The Mediation Clause in Real Estate Contracts

Because real estate disputes are so common, many contracts now contain an appendix called the mediation clause in real estate contracts. This is simply a piece of paperwork that states any potential disputes will go through the real estate mediation process before any type of litigation can occur. Sometimes the mediation clause in real estate contracts will be absent and instead focus on arbitration.

Shapiro Mediation has an experienced and expert team of real estate mediators ready to help you. With local offices in both Florida and Massachusetts, we know what it takes to get you the outcome you want. Contact us today at (339) 298-7733.

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