“How much do you charge for a real estate transaction?” As you might expect, we get this question quite a bit. Believe it or not, the answer is not that simple! Let’s start with the easy part. We charge a flat attorney fee of $675 for a “standard” real estate purchase closing transaction.
The hard part is determining what is “standard”! It is easier to point out what is not standard! The following items (this list is not fully exhaustive) would be considered “extraordinary” and would not be billed at the standard fee:
- a transaction with a purchase price over $750,000 million dollars;
- a transaction where the buyer obtains more than one loan;
- a “for sale by owner” transaction where we prepare the purchase contract;
- a transaction where one or more of the buyers signs lender documents via power of attorney;
- a transaction involving a §1031 like-kind exchange;
- a new construction or rehab contract with a developer/contractor seller;
- a post-foreclosure or REO purchase transaction;
- a transaction for a multi-unit property or one containing tenants;
- a short sale or other distressed seller purchase transaction;
- a transaction where we have to draft document for the condominium association;
- a transaction where there is post-closing work such as a tax reproration;
- a commercial real estate purchase.
So what’s left? A good old-fashioned residential real estate purchase. A home purchase where there is a real seller and a real buyer. For that kind of transaction, we usually charge $675.
As attorneys, we are always mindful of the fact that clients do not like “up-charges” and want to know ahead of time what their fee will be. Whenever that is possible, we also like work on a fixed-fee basis. When that is not possible, we charge an hourly rate. Our goal is to be fair to ourselves and fair to our clients.
Let me clarify a few other issues. What happens if the transaction does not close? Usually, we will bill some amount not to exceed our quoted fee depending upon how much work was performed on the transaction. A fee even when the deal does not close? Absolutely. Why? Because an attorney, doing the job right, is going to give the client the best advice possible. In some situations, that advice may be to terminate the transaction. Unlike the lenders and real estate brokers, who have a vested interest in persuading their client to close because that’s how they get paid, the attorney has no vested interest except to try to give the client the best service and advice possible. Is the fee ever less than $675? Maybe. Sometimes a transaction may not be “full service”. For instance, a client may come to us after the time for the attorney review and home inspection contingencies have expired. In such a case, we do a bit less work and charge a lesser fee. In addition, we sometimes provide a discount when we represent a buyer who is also selling a piece of real estate at the same time as their purchase.
It is not always easy for a real estate buyer to know what factors affect the fee for their real estate closing. In fact, this article can not begin to cover all of the different factors that can go into pricing a closing! That is why we are always willing to spend a few moments on the telephone to get to know a prospective buyer client, to discuss the parameters of their transaction, and, if possible, to provide an appropriate fee quote for representation. Feel free to contact us to discuss your purchase transaction today.