What am I Paying my Real Estate Lawyer for?
"Your realtor and your mortgage broker carry your home purchase (or sale) the first 200 yards. Your lawyer brings it home for the last 20 yards.”
That’s paraphrasing a friend of mine, realtor David Smith, describing the role of a real estate (or 'conveyancing') lawyer. And, you know what? It’s true. By the time the file gets to us, your lawyer, most of the journey is complete. Contracts have been signed, funding has been secured, subjects have been removed. You’re just about there – mere days away from either getting the keys to your new home, or taking your cheque to the bank.
So why do you need to hire a lawyer? Well, first, you have to – you need a lawyer (or notary) when you buy or sell real property in BC. Our fees are modest (check out our pricing page) when compared to other closing costs. Despite these prices, I’m commonly asked: “what are we paying you for? And, why should I hire a lawyer instead of a notary?” Here are three ways in which your lawyer plays a critical role in your real estate transaction.
#1: The Final 20 Yards Are Important
First – even though we only carry the deal for the last 20 yards, those 20 yards are really important. If you’re buying, your lawyer handles such details as finalizing your funding and getting your mortgage money, ensuring that the seller returns the signed transfer forms, and registering the transfer so that you actually end up owning the property. No big deal, right? If you’re selling, your lawyer ensures that the buyer pays for the home, your mortgage gets paid out and discharged, and you get your sale proceeds.
#2: We Do More Work Than You Might Think
If you’re like most real estate clients, your interactions with us are limited to some phone calls and emails to coordinate an appointment and gather information, and then a signing appointment, which is usually between 10-25 minutes. Based on that, I don’t blame some clients for wondering where their money goes. For our modest fees, however, you’re getting a lot of value. With all of the document drafting, number crunching, and correspondence with third parties (insurance providers, mortgage lenders, strata corporations, etc.) that we routinely do for files, it’s not unusual for our office to spend multiple hours on each transaction. We do lots of work behind the scenes to make your signing appointment as worry-free as possible.
#3: We’re There if Things Go Wrong
Here's where having a lawyer instead of a notary comes in handy. Real estate deals rarely go sideways once they reach the closing stage. However, if last minute hiccups – issues with funding, disputes between the parties, stuff like that – do arise, that’s where your lawyer shines. And, that’s when a notary would have to refer you out to a lawyer. You’re paying for peace of mind when you hire a lawyer to help you with your conveyance.
Take this real-life example: a client was purchasing a townhouse. On the day of completion, the evening before possession was to change hands, the hot water tank burst, causing thousands of dollars’ worth of water damage. The next morning, we had to negotiate with the seller’s lawyer to draft an addendum to deal with holdbacks from the purchase price, insurance matters, that sort of thing. Had our client used a notary, that notary could not have done any of that work (notaries can’t give legal advice) and would have had to refer the client to a lawyer. Assuming the client could find a lawyer, that lawyer would have to familiarize themselves with the details and likely get a retainer before doing anything. But, they hired us off the bat – so they were covered.
Think of a lawyer as an insurance policy. Hopefully nothing happens that makes it necessary for us to jump in and fix things. But we’re there if you need us.
Conclusion
Your real estate lawyer is the final stop in a long journey. The last 20 yards. These 20 yards, however, are critical to completing your transaction. Remember that you’re not only paying your real estate lawyer to close your deal – you’re also paying for peace in mind so that you know, if things do go awry, we’ve got you covered.
One final note: for many law firms, residential conveyancing is, unfortunately, a neglected part of their practice. Many call it a “loss leader”. For us, however, conveyancing is a valued part of our business that we handle with pride. When you hire us for your real estate transaction, we strive to show you how excellent service can make your experience more pleasant, and how that service extends to every part of our practice.
If you have any questions, or to talk more about how we can help you with your real estate needs – or any other area of law that we serve – please phone or email us and we’ll be happy to talk to you.