S.E.C. Real Estate Observer

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The first time I used the Pro Bono (“for the good”) Formula was for the mother and father of a client. It was many years ago, but it set the stage for several things for me in the future and it is still working today.

Most lawyers from time to time provide their professional services to someone without charging a fee. Their reasons for doing the work Pro Bono (free) is most often benevolence and a sense of giving back to the community. Attorneys recognize that people simply do not understand law and that they can’t do it for themselves. Many people cannot afford a lawyer, so if attorneys weren’t occasionally willing to contribute their time and knowledge, some clients could not solve their legal problems.

Like the law, real estate issues are often complex. Unfortunately, the real estate fraternity does not make Pro Bono part of its recognized culture. I think we should.

The S.E.C. group is unique in that the members are trained to solve problems that many other real estate professionals would have no idea how to solve. While the audacity of that statement sounds braggadocio, it is true. Thousands of real estate problems simply go unsolved because the general practitioner doesn’t want to get involved in things they don’t understand and that are outside their area of expertise.

My first Pro Bono case was based around the fact that my clients lived in one city and their mother and father lived in another. My clients visited them every week, but it was a drive through heavy traffic and it was often a three-hour round trip. The parents lived in a small home that was free and clear. The parents were disabled and on welfare. They had no other assets.

My clients wanted them to live closer, but, at that time, the welfare laws would not permit the parents to rent out their house and relocate. The law would not allow them to sell their house and buy a new one. They couldn’t even give it away. If they sold it, they would have to go off welfare until they had used all of the cash from the house sale and then go back on welfare when the cash had been spent. Moreover, if they went off welfare, they would loose their indispensable medical benefits. They were stymied, so my clients just kept driving. The clients didn’t know how to resolve real estate problems and finally turned to me for help. The parents needed a creative approach, but could not afford to pay me. I agreed to do what I could on a Pro Bono basis.

I contacted the welfare people in both cities and I talked to the representative that dealt with the family in the city where they lived. I also talked to the representative in the city where they wanted to move. They fully understood the problem, as they had other families with similar situations.

I mapped out a plan, put it in writing, and got concurrence from the clients and then agreements from both welfare representatives. Part of the agreement with the welfare offices was that I would keep them informed of the progress and provide them both with copies of all documents related to the proposed transaction.

I don’t remember the value on the house, but it was probably $20,000 to $30,000. Today, the house would be about $200,000.

I contacted a mobile home sales company selling the very best products available in the town where my clients lived and the parents wanted to move. The plan was to exchange the parents’ single-family residence for a high-end mobile home to be placed in a mobile home park near the children’s home. To make the exchange attractive to the mobile home dealer, we agreed to accept a value for the parents’ home that was somewhat less than the true market value. The house was in excellent condition and would be easy to market.

The parents were excited because the new, high-end mobile home was very attractive and more than met their needs. The parents were able to select the mobile home they wanted, fully furnished, and have it placed in a very nice park a short drive from the children.

The welfare representatives accepted the plan because it did not violate any welfare regulations. The parents did not sell their home, nor did they rent the home and relocate, nor did they give it away. They received no cash. They simply exchanged one home for another. The welfare representatives also liked the plan because the mobile home could be moved to a new location if and when the daughter and son-in-law ever moved.

Everyone was happy. The clients were now able to avoid the long weekly commutes. The parents could now see the children more often while enjoying a brand new home. Because of the margin between the values of the properties, the mobile home dealer made enough additional profit that he agreed to pay all the escrow charges. Within a very short time of closing the exchange, he sold the house at full market value.

Even though I was not paid, I received the satisfaction of solving a problem using some creativity and, at the same time, created a stronger bond with my now long-term clients. The Pro Bono Formula, whether you use it on a regular basis, or only once in a great while, is something I think that we should all consider. There are owners out there with problems that need our problem solving skills, but not all of them can afford to pay our fees.