Don't "Discount" the Value of a Good Real Estate Attorney
Phil Faranda is a talented writer and a top-flight Realtor in a competitive environment. Even though what he says may ultimately inure to my benefit, I thought you would want to hear these words from a seasoned professional, not just me.
New York is an attorney state, and in our area they also prepare contracts. Having a good attorney is crucial, for many reasons, not the least of which is obvious: the other guys have one, and you don't bring a knife to a gunfight. Lawyers examine title, advocate, and draw up addenda, pre possession and rent back agreements, and in general partner with the brokers to shepherd the transaction to a closing. Like them or not, they are inextricable to the sale of a home. If I refer an attorney, I like and trust them.
All too often, I'll see people who shopped around for a good mortgage and hired the best agent suddenly decide that it is better to save $500 on their attorney and risk peril because they think they are being smart.
Famous last words: I'll use my cousin the patent lawyer. What could go wrong?
Answer: Plenty.
In Westchester County, the median sales price of a home in 2010 was $630,000. The median? $827,900. A typical attorney fee is $1200.
In my book, that is one of the best bargains going considering the copious work that closing a transaction in 2011 takes. Just today, a lawyer I know told me she preferred divorce work, because it is about the same amount of work for far better fees. Amazing, but she's right. Making deals happen these days is hard! And buying a home being on par with a divorce would be unthinkable in years past.
There was a time when real estate was far easier than divorces. But with the layers of caution from the lenders, the ever-increasing demands from buyers and the overall freaked out nature of many sellers, those days are gone. Yet the model of fees for New York lawyers is still based on an era when real estate closings were, relative to today, a rubber stamp.
If I were buying or selling a house today with the gigantic money changing hands, I'd find the best lawyer I could and offer them TWICE their quoted rate, just to make sure I was given white glove treatment. If you think that's crazy, consider the fact that $1200 is really just a speck of change with the enormity of home prices we pay in New York. Of course, you don't have to be me, but you also have a choice about trading a few hundred dollars for inferior representation.
At the very least, I would avoid a lawyer that came gratis through my union or advertised a cut rate, because I have never in 14 years and 300+ transaction be the zealous advocate that consumers need in this market. And oh, how I dislike working with inept or unresponsive attorneys! Yet there are people who trust the largest business transaction of their life to a guy who advertises a low rate and never returns calls or stays on top of the crisis de jour. It is a big deal. There are no "do-overs" in real estate. Retain a specialist.
I cannot believe I am saying it, but it's true: real estate lawyers in New York are vastly underpaid. Quibbling over their fee in light of the high stakes is the epitome of being penny wise and pound foolish.
Hamburger fees get you hamburger representation. I want my clients to get filet mignon advocacy, and I'll be the first to say that it is worth every penny.
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