In this article, we will be sharing with you all What is the Average Cost of Real Estate Attorney. If you are thinking of buying or selling a house or property, then you might be wondering if you should hire a real estate attorney. Real estate attorneys can be a huge help when it comes to the buy-sell process of a property, especially if it’s your first time.
Hiring a lawyer will help you carry out the entire buying/selling procedure of the property or home without any stress or additional effort. They will also ensure that everything falls in line with the legal requirements.
Also, some states have laws that make it mandatory to have a lawyer at the closing of a transaction for selling or buying a home or property. So in such cases and in general, to be on the safe side, you might want to know about the average real estate attorney cost and all the related questions.
So, suppose you want to know about the Average Cost of a Real Estate Attorney. In that case, if they charge on an hourly or one-time basis, the factors that affect the cost of an attorney, states where it is mandatory to have a lawyer at the closing and answer to many such other questions, then go ahead and read the article below to get a complete idea of it all.
What is the Average Cost of a Real Estate Attorney
Revisit a section
We all are somewhat aware of the fact that the procedure of buying or selling a property or a house can be very complicated, especially for those doing it for the first time. Buying and selling of a property like a house is indeed a huge transaction and requires utmost attention and compliance with the law not to let any issues arise later on.
For this to go smoothly, the role of a lawyer is very crucial in the buying-selling process. A lawyer will see that everything fits in the legal criteria and that your precious money or property is not compromised due to any errors.
Hence it is essential that you hire a lawyer for your transaction. Now certainly, since buying/selling of a property is a serious thing, the attorney will also charge you something for their valuable services. You can check the below description to know more about a lawyer and their charges.
To give you an idea, you can look at the Average Cost of Real Estate Attorneys, which can be around $2,500 to $3,000 for a general sell-and-buy transaction. Just note that this cost can go higher in different states and according to different circumstances.
Also, note that not every case will be the same. Some would be very easy with not much effort required by the lawyer, whereas some would be very intricate and would need the attorney to put in a lot of effort in the case.
In some situations, there could also be an involvement of a foreign buyer which will further make the process complicated and thus higher fees for the attorney. Hence, the more complex the transaction gets, the higher would be the fees of the attorney.
Even if you are considering the budget here, let me remind you that buying and selling a property is a very big deal, and if even the slightest thing goes wrong, it could result in big chaos and mess, which no one would, of course, want.
Spending a few thousand dollars one time for a good attorney to get your buy/sell process of a property done very smoothly is definitely worth it. Also, considering many states make it mandatory to hire a lawyer for such a transaction, you have to hire a lawyer for your case.
How Attorneys Are Paid
If you are planning on hiring a real estate lawyer for your buying or selling procedure of a property or a home, then you might first want to know the procedure of how it all goes. It is very obvious to get such questions, especially if it’s your first time selling or buying a property.
Now, the payment taken by the lawyer could be on an hourly basis or a one-time, flat rate paid at the end of the transaction. The average cost of an attorney could be from $150 to $350 for an hourly rate.
In the majority of the cases, the lawyers will charge fees at the end of the transaction at the closing table. This is the customary way of most real estate lawyers.
Now further, the lawyer can give you a complete package system as their service, which will include everything right from the start to the end of the case. They will count the hours they spend till the work is done and may make a contract.
Some other packages involve handling the case before going to the closing table. Before you go to the closing table, you will have to get some tasks done by the attorney like the preparation of contracts, deeds, transfer papers, title search, etc. The attorney can agree to do such tasks and charge on a flat rate or hourly basis accordingly.
Of course, one thing you cannot miss out on is the negotiation that you should make for the attorney fees in an appropriate way. At times, there can arise a misunderstanding between the lawyer and their clients about the fees.
So make sure that you are very clear with the fees and see that they do not incur any hidden charges like printing costs, etc., to their fees. Also, if any misunderstanding has already happened, it is suggested not to get into any fights with your attorney.
The reliable solution here would be being very clear at the start, negotiating the charges right at the beginning, and getting the agreement in writing.
How much are Real Estate Attorney Fees?
These are just estimates from the data available and some research. The charges of an attorney can differ a little from the below-estimated amounts.
Attorney fees for –
- Simple residential transaction – $500 to $1,000
- Real estate litigation – $5,000 to $15,000
- Quiet title actions and partition actions – $1,500 to $5,000
- Hourly rates – $150 to $500 per hour.
Attorney fees for different services –
- Real estate contract drafting or review – $500 – $700
In some cases, the lawyer only has to review or draft the real estate purchase contract, so it is basically a simple contract drafting or review. So one might have to pay attorney fees of just $500-$700. This does not include any extra services like closing assistance, negotiation, resolution of disputes related to transactions, etc.
- General transaction counsel – $1,000 – $1,500
In cases where the attorney has to do more than just review or draft a contract, like answering general questions and looking over the closing documents without having any issues, then this would count as a general transaction counsel. It would involve advice, contract review, and closing counsel.
- Attorney in-house closings – $1,500 – $3,000
The Attorney in-house closings of more complex transactions with title issues, minor disputes or negotiations, etc. If a transaction faces any complications, then the attorney’s face has to be increased above the average. In the case of an hourly model, the additional cost will be in proportion with the extra time needed.
Attorney Cost for a Commercial Real Estate Transaction
In case of a commercial real estate transaction, the below can be charges of attorney for commercial real estate transactions.
- Small commercial transactions – $1,500 – $2,500
Such transactions naturally cost less as they are limited to basic services like general counsel, contract drafting and review, and basic closing review.
- Mid-size commercial transactions – $3,000 – $10,000
These will cost you around $3,000 – $10,000 and can involve minor disputes, title issues, or heavy negotiations.
- Large commercial transactions – $10,000 – $30,000
Such large commercial transactions could be complex in nature and might involve intricate things like zoning compliance, title working, disputes, and land use issues.
Is Legal Fee all-Inclusive?
Well, this is a very subjective question as some lawyers might assure you that their fees are very low as compared to the general legal service fees. This is done, of course, to entice the clients. They may say that you will have to pay hourly fees or one-time fees with no other expenses along with it.
However, such lawyers might, later on, add up additional costs like their travel, phone calls, printing, as well as preparation for sitting at the closing table, and so on. So make sure that you make everything clear right at the start so as to avoid any extra costs.
Hourly Fees or Flat Fees?
Some lawyers charge an hourly fee, while the majority of real estate attorneys go for one-time, flat fees. The hourly fees depend on how long the lawyer has been spending on the case and how much they want to get paid for it. Now, this hourly rate of an attorney can range from anywhere between $150 to $300.
However, as mentioned before, the majority of the lawyers prefer flat fees which is paid after the completion of the transaction. Hence, if your lawyer is saying that they work on an hourly basis, then you must make sure that there are no additional charges applied apart from the hourly fees.
Per transaction fees vs. hourly fees
The real estate lawyers generally do not charge an hourly fees. They usually take a one time fees which is paid after the closing of the transaction. This is the obvious case in New York but it can change as per the state and the attorney.
However, the typical scenario is where the fees is paid after the completion of the transaction. Hence, buyers or sellers should not be hesitant to reach out to a real estate attorney as there is not a lot of costs incurred and their service is truly helpful.
Payment in Advance
In the majority of the cases, the lawyers charge fees that need to be paid at the closing and specifically after the transaction has been completed. In the closing table, there is a closing cost involved; hence the fees of the lawyer should be paid at the time of closing.
However, some lawyers can also negotiate 50% of the total fees to be paid in advance. Although this can be a case with a few, the generally accepted system is where the attorney is paid after the completion of the transaction at the closing table. This is good for the lawyers and many follow this professional method for receiving payment for their service.
Fees for Complex Transaction
It goes without saying that the fees for a complex transaction would be more than that for a normal transaction. If there is a property with some complications involved, then it becomes difficult to handle the situation. The real estate attorney will have to put in more efforts in such a case.
Also, if there is any case that involves a transaction with a foreign party like a foreign buyer, then the real estate lawyer will have to work more in order to provide the explanation as per the law of this country to the foreign buyer. As it becomes difficult to deal with such cases, the fees of the attorney certainly increases here.
Working with a law firm vs. individual attorney
If price of the attorney is your concern, and you are looking for a real estate attorney then you can approach an individual lawyer or a small firm for this purpose. As they would charge lesser compared to a big or well established law firm.
However, note that with a small firm or an individual law firm, you might have to wait for a longer period of time for a callback or document preparation as the manpower involved is less. So, if you want the work to be done fast, then do take this and similar other factors into consideration.
Attorney Fees For New Development
In case of a house or an apartment in a new development, there will be a couple of things that you need to consider while going ahead with the real estate attorney and their fees.
So firstly, the majority of the new construction properties and apartments are condos. Hence, your attorney will be required to pay additional attention to all the details while reviewing the offering plan. So in such a case, you would want to hire a good lawyer.
Next, while you are buying from the sponsor of new development, then it is traditionally a custom for the buyer to pay the attorney fees for the seller’s attorney fee unless it has been negotiated otherwise. So, this will add somewhere around $3,000 to your fees.
What factors will affect the attorney fee?
As you might already know, the transactions involving real estate can differ a lot according to the particular situation. When you are buying an already existing condo or house or co-op then the purchase you are making should be very simple and straightforward. And so should be the fees of your lawyer.
You can opt for an All-cash procedure which will be much better and simple. This is because there are very less document requirements, and you as well as your lawyer will both have to review the contract and the closing process.
As against this, when it comes to buying a luxury new development or buying through a corporate structure, or properties having title issues or any distressed properties, then certainly there is more complexity in such cases.
There needs to a lot more attention that has to be paid when it comes to purchasing such a property. In such cases, you might have to pay more to your attorney or more than usual legal service fees.
What are real estate attorney fees for closing?
If you are wondering about the amount you will have to pay for hiring a real estate attorney. Generally, the real estate attorney will undertake the activities like drafting a contract or a PSA i.e., a Purchase Sale Agreement.
They will help in negotiating your contract with the seller’s side if need be. They will also look after all the title documentation and if it is accounted for and give solutions to any problems that might arise.
They draft the deed which needs to be recorded. They also draft the settlement statement or the closing HUD-1 document, which accounts for all the costs that were involved in the sale of the house or property.
Lastly, the real estate attorney will make sure that all the documents that were involved in the sale transaction of the house went on record.
What does a real estate attorney do for a buyer?
If you did not already know, a real estate attorney could help you when you are buying a home, especially for the first-ever time. You might not be aware of all the things involved in buying a house, all the paperwork, and documents.
A real estate lawyer will take care of everything right from looking at the seller’s deed as well as title chain to being available for the closing as a closing attorney so as to make sure that everything happens smoothly.
They will also help you with some proper guidance and advice, property-related problems, finding partners to work with like a company, lender, appraiser, and so on.
Who does a real estate attorney represent?
When there is a transaction of buying or selling a property, the real estate attorney will present the buyer or the seller side but not both. So, a real estate attorney will either represent the buyer or the seller. Both the sides can hire their own attorneys. Basically, a real estate attorney will advocate for the client.
What does a real estate attorney do for the buyer and seller?
The real estate attorney is a necessary person of involvement when it comes to the legal transfer of property or home. In many states, it is compulsory by law to include a real estate attorney in the process. The role of a real estate lawyer differs for both the seller and the buyer.
In case of a buyer, the real estate attorney will make sure that the offer been made from the opposite party is valid. For the seller, the real estate lawyer will help in the negotiation when it comes to the sale. The buyer and seller can always hire different attorneys.
What is the difference between a real estate agent and a real estate attorney?
The difference between a real estate agent and a real estate attorney is their different jobs. A real estate agent helps you in tours for your home when you are buying one and finding the right home for your needs.
If you are selling a home, the real estate agents will help you in listing your home for sale and also get you the best possible price for your home, which would already include the negotiating with a buyer’s agent.
Whereas real estate attorney will generally look at the closing and performing title checks. The lawyer will make sure that the transaction is completed considering all the legal requirements. At times, just like the sale transaction by the owner, a real estate attorney or the coordinator of the transaction can get an agent.
How much does it cost to hire a real estate attorney?
In a lot of states, a real estate attorney is not necessary. The cost of hiring a real estate attorney differs, but generally, there are two models of an attorney’s fees. A lot of real estate lawyers charge on an hourly basis with rates ranging from $150/hour to $350+/hour.
Whereas other attorneys might have a fixed fee for conducting the closing. This is a common sight in the states where it is needed. In case you hire a real estate attorney, you can expect to pay them anywhere between $500 to $2000. This will majorly depend on the services you require from the attorney.
What states require a lawyer for real estate transactions?
A lot of states have laws that require the physical presence of a lawyer for real estate transactions while closing such a transaction. These states include – New York, Alabama, Delaware, Connecticut, Washington, D.C., Kansas, Florida, Kentucky, Maryland, Maine, Massachusetts, New Hampshire, Mississippi, New Jersey, North Dakota, Rhode Island, Pennsylvania, South Carolina, Vermont, West Virginia, Virginia, and Georgia.
Do note that such requirements can always change as per the new legislation passes. So, you will have to stay updated with such crucial information. You can get all such updated news from the real estate professional of your locality so as to make sure that your transaction fits in the legal framework.
I hope the above article on What is the Average Cost of a Real Estate Attorney helped you in a number of ways. We have tried to cover as many aspects as we can to ensure that you get all the help you need in this matter.
If we have missed out on any information that you were looking for, do let us know in the comment section so that we can update it as soon as possible. Also, if you have any more queries about an attorney and their fees, then you can ask them in the comments below. We will be glad to help you out!
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