Mike Herring, Broker Associate, Panama City Beach, FL

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When do you need a real estate lawyer, and what does it cost?

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need-a-lawyerBy Jayson Schwarz.
Lately I have had a large number of homebuyers come to me after the 10-day cooling-off period in their offer has expired. When I ask why they waited, I get one of two standard responses: “I didn’t think I needed a lawyer until it was time to close,” and “The sales agent told me I didn’t need a lawyer until it was time to close.” Wrong on both counts – get a lawyer early!

A lawyer must advise you at the time you make your offer, and it is critical that you see a lawyer before your deal is firm. It is important that your lawyer explains all the costs you will face, and the potential changes and delays you may encounter. Insist on this, and if you don’t get what you want or need, see another lawyer. Lawyers are service providers, just like anyone else, and as the customer, you should get the necessary information to make an educated decision. There is a clothing retail chain that I remember in Florida that has a slogan which sounds sort of like, “An educated consumer is our greatest asset.” This holds true for much of life and seeing as a home is one of the most important purchases you will ever make, it’s your job to become an educated consumer.

Okay, what about that lawyer? First of all, you are going to pay the fee – whatever the amount the two of you agreed upon. You did of course have a pre-agreed fee, didn’t you? Then there is the list of disbursements. Disbursements are those monies expended by your lawyer on your behalf which are necessary to properly search and seal the deal. Be careful, it is here that someone may try to take advantage by charging large fax, mail and photocopy fees. Make your lawyer justify all expenditures that don’t make sense.

Disbursements are generally between $450 and $650, and include such things as electronic searches, registration, execution searches, title insurance, cheque certification, status certificates for condos, and more. Don’t forget about the applicable taxes.

Generally speaking, your first meeting with your lawyer should be free until the time you retain him or her as your lawyer. Retain? What that simply means is “hire.” Make sure the retainer agreement is in writing and that it sets out all of the services the lawyer is going to perform and what the lawyer’s and staff’s hourly rates may be if they perform services in excess of those included in your “package price.” Make sure you get a disbursement list with suggested maximums so that you have something to work from in your budgeting. When you retain your lawyer, you want the same certainty you would get in any contract.

Jayson Schwarz LL.M. is a Toronto real estate lawyer and partner in the law firm Schwarz Law LLP. Visit schwarzlaw.ca or email [email protected] and send your questions, concerns, critiques and quandaries.

Posted in Contracts/Legal, Helpful Tips, Real Estate Practices

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