Blocks & Lots

Attorney’s fees: How much should you pay your real estate attorney?

What’s an average price for an attorney’s fee in NYC?

It’s pretty much a certainty that if you are buying a $50 million plus condo, your attorney’s fees will be more than if you were buying one for $500,000. That said, this fee is generally a flat price — around $2000 to $3000 per purchase for a “normal” transaction. It’s a given that outside of NYC, an attorney’s fee will drop in areas such as Long Island or the Hudson Valley.

What should you be aware of when estimating your attorney’s fee?

Closing attorneys who charge by the hour! Some family lawyers have a one size fits all approach. One minute they’re handling a divorce, the next filing a law-suit against a nursing home and the next they’re doing your closing! These attorneys may insist on charging a by-the-hour rate. That only shows their inexperience when it comes to real estate. Avoid these guys unless the transaction is very basic.

When is it ok to pay more to a real estate attorney?

If there’s a lot of time involved in a complex transaction. For example, sending out Power of Attorney forms to disparate parties or tracking down heirs to a property. Don’t expect all this to be included in a normal closing price. Also, if there is a multi unit property there may be additional factors involved such as code issues, tenants, leases etc. The same goes for a transaction with a foreign buyer. 

New constructions in NYC can bring increased fees

Watch out for those shiny new amenity filled condos in NYC. Developers never miss a trick to try and make good on their investment and that includes charging you for some of their closing costs. These can include NYC and NY State transfer taxes and the sponsor’s attorney fees. This results in buyers of a new construction being hit with a double whammy in fees — for both their and the seller’s attorney. Ouch!

Guess who decides on the rate charged by the sponsor’s attorney — you guessed it, the sponsor! It’s a bit like having Tony Soprano show up to the closing table. Needless to say the sponsor’s attorney’s fees have been going up faster than condos against the Manhattan skyline and it’s not unheard of for them to charge $3000-$5000 these days.

In the current NYC buyer’s market, however, developers are desperate to offload an excess of inventory. It means everything is more negotiable than ever including the purchase price and closing costs. Make sure your attorney or agent is experienced enough to get you the best deal possible.

Jeff Vasishta