Many first-time home buyers don’t realize that buying property not only involves a large deposit, but a dive into the intricacies of New York property law. A buyer’s real estate agent can help make the process less stressful, but a real estate attorney is also a must.
Why? Because in New York State, all real estate contracts of sale need to be drawn up by the principle or their attorney. It is against the law in NY for real estate agents to draw up sales contracts or to review them and offer you legal advice.
As a buyer you run the risk of getting a contract devised by your seller’s lawyer, which will probably not have your best interests in mind. You need an experienced attorney to look out for your rights and protect you. Your attorney will scrutinize the deal for legal or financial risks to ensure the seller can deliver the home cleanly.
Even if you refuse an attorney for the contract signing, you’ll most likely need one down the road anyway as most banks won’t lend you money for a mortgage without legal representation. For the biggest purchase of your life, your best bet is to get all the help you can.
What Do Real Estate Attorneys Do?
Ideally a property lawyer will do much more than just show up for the contract signing. Your lawyer should do his/her due diligence, negotiate the deal for fairness and represent the buyer at the contract closing. Typical services performed by a real estate attorney include:
· Drafting or reviewing the contract
· Loan and title commitments
· Searching for liens
· Verifying charges are correct and fair
· Attending the closing and reviewing all documents for accuracy
· Handling title and closing documents
· Confirming the title company completed its job after closing
Can a property lawyer get you a better deal overall?
Generally, the price of the property is set by the seller or the real estate agent, or negotiated between the seller’s and buyer’s agents, but the attorney can investigate whether this price and all other charges are justified.
For instance, if the house is listed as having three bedrooms, but your lawyer determines one of the bedrooms doesn’t meet legal requirements, that could mean a price cut. Additionally, of the house does not have cleared certificates of occupancy, that will extend the negotiations to either rectify the issues, hold monies in escrow, or reduce the price.
How Much Should You Pay for a Real Estate Lawyer?
The average real estate lawyer based in New York will charge anywhere from $2,000 to $3,000 as a flat fee for a normal purchase or sale transaction. At McGrath Klaus & Associates, we charge $1500 for a typical closing, but this fee can be greater for a more complex transaction or for new developments.
Real estate attorney fees are typically structured as a flat fee per completed transaction. You should beware of any lawyer asking for hourly pay for a real estate deal as that’s a sure sign that the lawyer does not specialize in real estate transactions.
If your partner insists on using the family lawyer who doesn’t specialize in real estate, make sure you do your own research and hold your lawyer accountable for all the services a real estate attorney should perform. Lawyer fees are typically taken at closing so there is no need to pay upfront.
When you are spending a large sum of money on what will most likely be the largest purchase of your life, make sure that you are represented by someone you are comfortable with and that you know will look out for you. Feel free to call us here at MK Law to discuss your next home purchase or sale.