How much does your lawyer charge?

Flipper/Rehabber · Chicago, IL · Member since 2016 · 123 posts · 38 votes

How much do you pay a lawyer on the buy side of a transaction? I saw another thread that said they work with lawyers that have $250/hr rates. I've been told $550 and $700 by individual lawyers to close on a property.

Also, do experienced flippers still use a lawyer for each transaction? Is it more or less to represent on an off-market acquisition?

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Nick Patterson

Real Estate Agent · Chicago, IL · Member since 2013 · 386 posts · 218 votes

$500 plus or minus a few hundred Always use a lawyer in all RE closings!!

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Lauren C.Pro Member
Rental Property Investor · Hamilton Township, NJ · Member since 2012 · 211 posts · 149 votes
9y
Hi @Francis Rusnak Of course the obvious answer is ,"it varies". I'm currently under contract on a property in NJ and worked with a lawyer that charged per hour at $200/hr and I could choose to use him during the whole process (attorney review, negotiations after inspection, at closing etc.) or a la carte.
On the other hand, my brother worked with a lawyer who had a flat fee between $1500-$2000 for everything during the 30 day close window regardless how many hours he worked.
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Paul Staszel
Investor · Burbank, IL · Member since 2017 · 49 posts · 21 votes
9y
In the Chicago land area I know of a lawyers who take $500 - $1000 no matter how many hours they work. The rate is low because they are building their name.
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Nick Patterson
Real Estate Agent · Chicago, IL · Member since 2013 · 386 posts · 218 votes
9y
$500 plus or minus a few hundred Always use a lawyer in all RE closings!!
3 Reply
Ronan M.Pro Member
Rental Property Investor · Chicago, IL · Member since 2015 · 352 posts · 281 votes
9y
$975 for my guy on mostly commercial deals (6+ units)
Its less for SFH and OO's...about $600 I think.
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Andrey V.
New York, NY · Member since 2015 · 10 posts · 3 votes
9y
I was quoted $650 for basic buy side representation but ended up paying $750. Additional $100 was for 'existent tenant's lease transfer.' There was additional 20-30 minutes of work and with attorney's $300+ per hour rate, I have no complains. This is for Chicago.
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Ravi P.
Investor · Schaumburg, IL · Member since 2015 · 219 posts · 104 votes
9y
@Francis Rusnak My typical attorney fee is $500 standard purchase and $600 for foreclosures and short sales. I recently purchase a small office building and my fee was $1,000. I never questioned or asked in advance what my attorney fees were. so I have no idea if I am receiving a GBD. I have known my attorney for over 20 years and trust him well enough that I do not feel that he would take advantage of me like that. Needless to say I have used him for mutliple purchases and will continue to use him. I would try to stay away from an hourly Attorney for residential real estate. I cannot see them working harder or creating any more value than a flat fee attorney. From what I hear 90 percent of the leg work is handled by their paralegals. Most importantly, work with someone you are comfortable with. It would not be a productive relationship of you have to question every move.
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Greg H.Pro Member
Moderator
Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
9y
Just to clarify as every state is different in the way closings are handled. Exactly what are y'all using your attorney for in regards to the closing? Do they perform the closing or just review documents?
In Texas we use title companies primarily. Fee attorneys can do closings as well. Typically, the title company does the title work, clears up any title issues and issues title insurance. Additionally, they close the transaction and charge both parties an escrow fee to do so
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Peter Hollyfield
Bellevue, WA · Member since 2017 · 9 posts · 8 votes
9y
I started with a lawyer that's about $500 an hour. After a while, I start to know what they are looking for, then I gradually moved to a lawyer that's about $200 an hour. At this stage, I am very well versed, so I can start either getting an even cheaper, jr. lawyer or do some myself.
The key is to have that $500 lawyer in the good books so you can call upon him when you have litigation, which I find the jr. lawyers aren't good at.
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Rachel Imhof
Investor · Chicago, IL · Member since 2015 · 138 posts · 54 votes
9y
I can recommend my attorney to you. He is excellent, very knowledgeable, has helped me through some very complex real estate transactions, easy to contact and only charges me $500 flat. PM if you would like his contact info
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Bret Allen
CA · Member since 2016 · 71 posts · 48 votes
9y
I agree with @Greg H. In Texas, most deals don't need an attorney as the title company handles the paperwork, insurance policies, and closing. I am usually only engaged on the one-off deals that fall outside the normal closing.
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Larry Smet
Flipper / Rehabber / Real Estate Investor · Toronto, Ontario · Member since 2012 · 392 posts · 77 votes
9y
Another vote for the "about $500 flat rate" club in Chicago...
In Chicago all closing are done by attorneys @Greg H. - other jurisdictions you can do your own at a title company. As @Nick Patterson mentions, always use an attorney in Chicago!
A note about the $500 per close - I've been using the same attorney for all my transactions in Chicago since 2012 (over 20 transactions so far - all SFH, 2-flats or 3-flats) so I suspect there's some preference there. I'm always happy to refer people to him as well, which reinforces the relationship and perhaps gives slightly preferential rates. A good attorney can be a huge help in connecting with others as well - it's definitely worth building that relationship!
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Greg H.Pro Member
Moderator
Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
9y
@Larry Smet
Thank you for the answer as it is hard to differentiate whether people are using attorneys to handle the closing or just to review documents. Like I said, in Texas both can handle closings but a title company has to have an attorney and an attorney has to be affiliated with a title company in order to issue title insurance
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Account Closed
Attorney · Skokie, IL · Member since 2016 · 270 posts · 109 votes
9y
@Francis Rusnak, I agree, always retain an attorney for a closing in Illinois. I'm not just saying that because I'm an attorney, but in many instances, the value an attorney will bring to the table will pay dividends. Furthermore, since Illinois is an attorney state, your broker, if you have one, is not necessarily training in dealing with many of the issues that come up routinely in a closing, as a broker in for instance, Florida may be. Therefore, you would need someone on your side who knows how to review title, closing documents, etc.
Finally, in response to the rates, generally, on residential deals, I would say $500 per transaction is fair. On a commercial contract, you can find a good attorney for $250/hr and perhaps even on a flat rate fee. For instance, on hotel closings, many attorneys in my field now offer a flat rate of $3,500 - $5,000 per transaction. Of course, this varies from attorney to attorney.
PM me if you have any questions.
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
TOO DAMN MUCH!
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Alex Bok
Real Estate Agent · Chicago, IL · Member since 2016 · 283 posts · 71 votes
9y
Would always use an attorney in IL for all transactions. Typically for not commercial units it is a flat fee at closing in my experience
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Scott Steffek
Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
9y
Francis,
I was shocked at what some people pay for an attorney. I do business in Illinois and Indiana. Believe it or not, almost no one uses an attorney when we close in Indiana. On the other side of the coin, almost everyone uses one in Illinois. What a difference! I think it all depends on your comfort level and level of expertise and experience. My attorney works for the title company we usually close with, so she looks over the documents for me. I just trust her to do her job. Sometimes she'll email me and tell me she's charging me $250 or so, because she had some "extra" work to do. So I think it depends on what I mentioned. However, since I'm not typically "buying" and just wholesaling, I don't always need one. If I get a contract that I'm not familiar with, I retain my attorney. But I pay $400 for a full blown "job" by my attorney for sfr's and small multi units. I hope this helps.
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William C.
Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes
9y
Scott Steffek isn't the difference because the 2 states require a different process for closing? For example Illinois is an attorney state where as Indiana is not. PA happens to not be an attorney state, we have title companies handle everything. Maybe an attorney can chime in and help clarify what the difference is between and attorney state and non? Why would one state require it, and the other not?
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Scott Steffek
Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
9y
William,
Rarely do people use attorneys in Indiana. However, I have investors who have closed in Illinois and not used an attorney as well. It's rare, because the title companies don't like it. I always recommend to my investors that they use an attorney, but in the end, it's their choice. If they don't use one in Illinois and there's a problem with the paperwork, it can create unwanted issues. I can close a deal in Indiana for less than $1000. In Illinois, it costs anywhere between $2500 and $3200. Pretty big difference for basically the same services!
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John Warren
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
9y
I have seen quotes of nearly $3,000 for a commercial deal I recently did (9 units) in the Chicago burbs. We ended up paying a little under $700 for that deal. Most small multi or sfr deals in Illinois shouldn't be more than $500 or $600 in my opinion.
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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
9y
300 dollars an hour is what mine charges. He offers to charge a flat fee but that's typically higher. It's expensive but already he's provided advice that I wouldn't have come up with on my own. If you're spending 10s of thousands on RE don't skimp in other areas
1 Reply
Mel C.
Flipper/Rehabber · Middlesex County, NJ · Member since 2017 · 29 posts · 8 votes
9y
My attorney in Central NJ charges 1k. I am not the most complicated client, though; most of our communication is via email, and I've been with him for 2 closings, each was spent in his office for max 10 minutes each time.
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Chris K.
Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes
9y
As a lawyer and as an investor that hires other lawyers to do work for me, I’ve been on both sides. In PA, I would say anywhere between $500 and $750 is a reasonable price for most standard residential properties. This assumes that there are no major title issues and the market hourly rate is around $200 to $300 an hour.
Interestingly enough, I've seen unexpectedly low fees in large metropolitan areas. My theory is that there is so much competition there that lawyers are trying to undercut each other's fees. That could be both good (e.g. cheaper costs for investors) and bad (e.g. lawyers paying less attention to you since they make money by doing volume work).
If you do repeat business with your lawyer, you many find that your fees will drop since both sides are familiar with each other. For example, I can tell you that I always end up spending a lot more time with a first-time client. This is because I don't really know how much this person knows about real estate. Beyond doing competent legal work, I genuinely do want to see them succeed as investors. To do so, I need to have a general understanding of what this new client knows or doesn't know about investing. The more experienced the client is, the less I have to worry about holding their hands step-by-step.
@William C. --- one cynical view is that some states have lawyers with a better lobby group.
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Victor SoBusiness Member
Real Estate Agent · Chicago, IL · Member since 2017 · 325 posts · 193 votes
9y
Hey Francis Rusnak my lawyer charges 450 per transaction (not hourly). He's great! PM me for his info!
Victor So Real Estate LLC517 Reviews
Website View Page
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William C.
Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes
9y
PA doesn't require attorneys so it's a little different here. We pay title companies to handle Closings. A buddy of mine purchased a condo in Chicago over a year ago and felt he was being ripped off by the attorney charging $500/hr. He went out and got a license to open a title company. Is there an opportunity to offer reasonable rates? It looks like some are paying $450/hr, and some $450 a transaction. Being from PA I'm not exactly sure how the process differs but I do know the similarities. Having to pay title insurance when you buy a home, and then 6 months later after we flip it always seemed so ridiculous to me. Is there a market for my buddy to charge reasonable rates in Cook County?
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Chris K.
Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes
9y
@William C.
Closing work is commodity work. Thus, I doubt anyone can create a sustainable business model that involves charging $500 an hour with a final bill ending up in the $1,500 to $2,000. Even if their actual billable rates are $500 hours, I doubt these lawyers can charge the all the hours they work as a title agent at that billable rate. So while your friend may succeed in the title company world, his main competition is probably not going to be the attorney that charges $500 an hour.
Do note that aside from legal fees associated with closing work, the final legal costs can drastically differ depending on the legal work that the lawyer must do. For example, let's say you are involved in a $20 million dollar project to purchase and renovate a factory while maintaining a special tax benefit associated with the land. The amount of legal work you have to do in these cases before closing is in the five figures (probably not six although it could happen). And much of the legal work doesn't have anything to do with the "closing" itself, but what happens after the closing. So when you compare what the attorney charged in the end, you have to make sure that you are not comparing apples to oranges.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.
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