While most home buyers have heard that they need to set aside money for “legal fees” it’s not uncommon for buyers to have very little idea what these fees will cost them and what is included under the “legal fee” umbrella.

What people generally refer to as “legal fees” or “closing costs” includes many costs aside from the fee actually paid to your lawyer for their services. These include fees for:

  • Registration of Deed
  • Registration of Mortgage (if you are taking a mortgage to purchase the property)
  • Sherriff’s Certificate and Search
  • Title Search
  • Survey and Real Property Report or Title Insurance Policy
  • Adjustments – these would include reimbursing the previous owner for any property taxes which had been paid in advance covering a period beyond the closing date, or for any fuel left in tanks on closing.

While on the surface it may seem like your lawyer is getting paid the full amount, their fee is in fact only a small portion of the closing costs. The following is an example of these fees broken out into individual components based on a purchase price of $259,900. To obtain an accurate quote on these costs when considering a purchase please contact a lawyer. These costs will vary depending on the cost of the home, whether you are going to pay cash of take out a mortgage, and other factors such as adjustments. Lawyers also set their own fees independently, so their fee may vary as well. When choosing a lawyer for your purchase keep in mind that while cost may be a major concern for you during the process it’s also important to have a lawyer experienced in Real Estate Law who can help make sure the process runs smoothly and on time. Don’t just ask for the lawyer’s price, ask questions about their experience, availability to you when you need to speak with someone, and ask around to find out what others who have used their real estate services have thought about the experience.

Purchase Price$259,900.00
Registration of Deed$1,139.60
Registration of Mortgage$1,160.00
Sheriff’s Certificate and Search$140.00
Title Search$197.75
Title Insurance Policy$279.00
Legal Fees$1,400
TOTAL$4,316.35 (plus adjustments)

A general rule of thumb often quoted is to set aside roughly 1.5% of the value of the house for closing costs, but that percentage can fluctuate based on many different factors, so it’s best to try and get as accurate a quote as possible and be prepared. It’s not always possible to know all costs upfront, adjustments in particular can come as an unpleasant surprise if you find for example that you need to reimburse the owners for $1,500 in property tax and $300 in heating oil on closing. Ideally the funds would be set aside in advance for these unexpected extras, but if they are not some lawyers may be able to arrange for deferred closing costs.

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