The Law Office of

---

      Dennis E. McHugh

This explanation is intended to briefly explain our role in real estate transactions.  The real estate transaction starts with an offer to purchase.  This can be a binding agreement.  Sometimes, some very important factors are set and not negotiable after this is signed, so we recommend that you get an attorney’s advice before submitting or accepting an offer to purchase.  The next document in the sequence of things is the purchase and sale agreement.  First of all, why should you have the agreement reviewed?  It seems like a simple agreement, very straight-forward, lots of boilerplate language.  The realtor’s association has drafted the standard agreement that is generated for the use of the seller in the agreement.  It is not a buyer’s form at all, so when we are representing a buyer, we suggest changes to the printed form and additional paragraphs that make the document a neutral agreement.  Even sellers have different business interests than the business interests of the brokers so we try to insure that the administrative suggestions in agreements from the broker do not interfere with the rights of the seller clients or potential options that the buyer clients might have.  The suggestions we make are based on experience and usually are practical considerations.  Sometimes they are important, sometimes they are not.  When they are important, we are glad we suggested them.

A real estate transaction is really the result of potentially seven people or entities working towards his, her or its goals independently.  The seller, the buyer, the listing broker, the selling broker, the bank and its attorney, the buyer’s attorney and the seller’s attorney all have different interests and jobs to do.  There is no ‘conductor’ or ‘referee’ coordinating events.  In most cases, it all works out.  That’s why people discount the need to do the little things that cost money along the way.  Sometimes it does not work out, however, and when it does not it costs a huge amount of money.

Starting from the purchase and sale agreement, it takes about an hour to review an agreement and to suggest changes or addenda that are needed to protect your interests as a buyer.  In addition, we have an addendum that we recommend for your offer, as well, to protect you at that stage.  One hour does not include any time explaining what should be done, why it is suggested, nor does it include any time negotiating the changes with the other party.

Attorney’s fees for various parts of a real estate transaction range depend on the time involved.  We have tried to describe all the possibilities in the fee estimates.

If you are purchasing a condominium and want us to review the condominium documents, that will take at least an hour.  Usually, the most important part of those documents for you is the By-laws and the Rules and Regulations.  If the condominium has already been formed, the documents probably have already passed muster from a lender’s attorney standpoint, so a cursory review might be done to double-check them as part of the loan approval process, but your interests, being more practical, might not require a careful examination.  You should be concerned about the operation of the condominium, decision making procedures in case of disagreements, its budgeting, capital reserve, politics, past history, etc., to make sure your living arrangements are coordinated.

If we represent the bank as bank’s attorney or you as a title examining buyer’s attorney, the fee listed on the estimate assumes that the title abstract costs $175.  Usually, the title abstract would cost that amount.  Sometimes, titles are complex and engender more expensive abstracts and that is not an anticipated expense in that fee.  In addition, that fee covers normal and usual chores necessary to close.  If there is a title problem or a practical problem with the seller, time is logged separately.

If we represent a seller, we have the same estimates for time and costs for the purchase and sale agreement.  If there is a broker, we are not required to do as much, but we still coordinate with the bank attorney to insure that buyer interests, broker interests, and bank interests do not impact our client in a way that is not anticipated by the purchase and sale agreement.  Our representation at closing insures your understanding the events that transpire and insures that no inappropriate last minute amendments or adjustments.  It also facilitates your getting the check.  A bank attorney will not give the seller the proceeds check until the deed is recorded.  The bank attorney will give it to the seller’s attorney and sometimes this helps with practical arrangements the seller has made.

If we represent the seller or buyer in the transaction but do not attend the closing, it will cost less.  We still investigate the adjustment issues, obtain and prepare a deed [for a seller] to be submitted in advance of closing or review bank documents [for a buyer] and reviewing figures to be presented at closing.  If we are to represent a seller or a buyer at a local closing, it usually costs a little more for the time required for that personal representation.

REAL ESTATE FEE

* ESTIMATES *

PURCHASE AND SALE AGREEMENTS

Previously Owned Homes

Review of standard agreement, without negotiation of terms

                                                             Anticipated time 1.0 hour*               $200.00

Negotiation of terms of agreement with other party

                                                             Anticipated time 3.0 hours*             $600.00

New Construction

Review of standard agreement without negotiation of terms/exchanges with other party

                                                             Anticipated time 2.0 hours*             $400.00

Negotiation of terms of agreement with other party

                                                             Anticipated time 4.0 hours*             $800.00

Condominiums

Review of Condominium documents                      

                                                             Anticipated time 1.0 hour*               $200.00

Representation of Seller

Preparation and Representation at a local closing** - prepare deed, obtain payoff figures, represent at closing.*  (Additional fee to clear title defects***).

                        WITH BROKER                                                                  $1,000.00

                        WITHOUT BROKER                                                            $2,000.00

Representation of Buyer (not Lender)

Preparation for and Representation at a local closing** -  review of commitment letter, review of note, disclosure statement and settlement statement, and representation at closing.*   $600.00

Representation of Lender - Purchase or Refinance

Preparation and Representation at a local closing** - obtain title abstract and other title information, review title, prepare preliminary title report for lender, prepare documents, represent at closing, disburse funds.* (Additional fee for title expense over $175.)                                          $850.00

Representation of Buyer - No Loan

Same as Representation of Lender above                                                       $850.00

 *ALL TIME DEVOTED TO MATTERS NOT DESCRIBED                               $150-$250 PER HOUR

** Travel outside of local area                                                                        $150-250/hour

***Preparation or negotiation of additional documents to clear title                    $150-250/hour