How much should an attorney charge for an NYC closing?
A long, long time ago, I wrote a blog post where I essentially eviscerated attorneys who charged more than $1000 for a real estate closing in New York. Years later, I realize how immensely stupid I was and how little I knew. Needless to say, this has bitten me in the ass in more ways than one. After speaking to various clients who have pulled up my old posts when they’ve called and asked for a price, I want to share why. So, how much should an attorney charge for an NYC closing?
What I wrote back then:
If we (attorneys) are charging you more than $1,000 and its a standard deal, then go see someone else. Attorneys are there ALWAYS for the front end issues. We make changes in the contract, which, for the most part, are rather obvious. However we can also play a vital role in making sure you’re not taken advantage of. By the time you’re at the closing table our job is basically done. Having said that, more than anything else, go with someone you think will answer your calls along the way, especially if this is your first purchase. An attorney may be great at handling a contract, but if he doesn’t have two minutes to answer the phone and tell you what he did and why its beneficial to you, then you shouldn’t be giving him your hard earned cash.
This was back in 2008 when I had about 6 real estate clients…total. I wrote what I wrote then because I genuinely believed that most of the work real estate attorneys did centered around beginning of the transaction. I learned the hard way I was only half right. The crazy part is that the market still has a ton of attorneys that charge $600-750 for a real estate closing. $750. Not that there is anything wrong with that. That’s fine for some. We just will never charge that.
What the hell do Real Estate attorneys do during a transaction anyway?
When an attorney represents you in a Real Estate transaction, only part of what he/she does is go through the Contract and make some changes. I would say that’s about 30% of what we do. On top of that, when you’re buying a co-op, we have to go to the management office (which can be God knows where-I’m looking at you, Tudor…) and inspect the financial documents (I still don’t understand why lawyers and not accountants do this, but what can I tell you) and the Board minutes to see if there is a massive civil war brewing in the building. If you’re buying a house, we’re making sure the C/O is correct and that that the zoning is proper. When we’re done with that, we typically have an inordinate amount of conversations with the two real estate brokers involved in an average deal because one is blaming the other for not including a credit for a broken window or some God awful sofa that has to be left after the sale. Once we’re done with our peacekeeping services, we also have to speak to you about the engineer you hired to go through the apartment and point out any issues. Then we have to speak to the sellers attorney and discuss why they shouldn’t kill the deal because we got an engineer to look at the place and the engineer went all YOLO and decided to list 25 things wrong with the place . And then, my dear client, there are the e-mails and conversations we have to have. On a standard deal, we average about 30 emails between ourselves and the client before we get into Contract. Now, could some of this be accomplished in a phone conversation? Of course. But we have those also. This is on top of that.
This gets me to the real reason we no longer charge $1000 per closing: You’re going to be speaking to us very, very, very frequently, and we’re going to make sure you don’t freak out and understand exactly what’s going on. THIS is a large part of the reason why we charge more. Saying nothing at all about the quality of the work, the sheer amount of communication you’re going to need is going to stop us from dealing with other clients. We’re going to need to speak all the time. And no matter how much you think your deal is going to be just a standard, run of the mill deal, it’s not. I promise you, it’s not. You’re going to have questions and concerns and you’re going to need to speak with us about your legal queries and what the seller can and cannot do quite often. Crazy things are going to pop up with your bank and your mortgage broker in Idaho is not going to be able to help sometimes. And we’re going to be here for you, and we’re going to respond pretty much immediately, because that’s exactly what I would want if I hired someone. But, because we do all that, and because you’re almost never going to be speaking to paralegals, we charge more than what other attorneys charge.
Is it worth it?
The depends entirely on you. The answer is yes and no. I mean that sincerely. If you’re the type of person who doesn’t want to speak to your lawyer because you just want to sign on the dotted line and move on, then we’re not for you. At all. Because we charge what we do (which, mind you, is not that much more and is quite reasonable) we’re not going to sign up the people looking at cost as the #1 factor when choosing an attorney. I’m OK with that. But, it is worth it if you value a constant stream of communication and working together on a deal. We want our clients to know what in the world it is that they’re signing, because they’re plunking down hundreds of thousands of dollars on it. We want them to know that if they have questions, we’re not going to charge extra or are unavailable, because that’s just an absolutely abysmal way of running a business and it’s fair to no one. We’re going to be here for you whether you have 2 questions a day or 20 (you will, trust me…) And we charge more because I sincerely believe the work and effort put in makes a difference in terms of how stressful your closing in New York is going to be.
So, while I can’t go back and erase seemingly idiotic posts from the past, I can tell you that there is difference in what we used to charge and what we charge now; there’s also a reason why.