So you have bought a new home; congratulations! A home is a place you can call your own; a man’s home is his castle. However, such a large purchase is also fraught with various responsibilities and dangers. You might already know that buying a home also involves a few legal issues, not unlike buying a motor vehicle. In the case of a home though, those “small” legal bills can quickly pile up and amount to a huge cost that you had probably not accounted for.
Thankfully, there are many ways you can minimise your legal costs when buying a home
This step, called conveyancing, includes working on mortgage negotiations and management issues that crop up when you are buying and selling property; few people buy homes straight up with a lump sum payment, so lawyers usually include dealing with mortgage issues in the work they bill as conveyance.
Because legal fees are such a subjective issue, there is no set “market rate” for you to consult as a reference. The two metrics that most lawyers will use to quote you a price is the price at which you are selling and/or buying property. Depending on the valuation of the property, it can either be a flat rate (called a fixed fee conveyance) or a percentage of the valuation as legal fees. Also, consider if the lawyer you are consulting is a fiduciary or not.
Your real estate agent would probably recommend a lawyer; don’t fall for this trap. Usually, such recommendations come on the back of kickback arrangements, so don’t be afraid to shop around. Ask an unbiased friend or an acquaintance who might have recently bought a home for their experience and recommendation. Call up some lawyers and ask them for a quick off the back of their hands quote. If you think someone is offering a competitive rate, set up an appointment.
Go on a few meetings to really understand the services they are charging you for. Many lawyers include handling the mortgage for you, as mentioned previously. The quote you obtain on the telephone can be surprisingly deceptive and designed to trick you into getting a meeting; it is much more likely that you would consent to their demands if you have taken the trouble to clear your schedule and attended a meeting. Lawyers will charge you sky-high prices for seemingly mundane issues like photocopying and postage. They might also charge you additional sums for transferring money above the charges made by the bank, often billed as a “convenience” charge. Of course, there are some things that you do need to pay for out of the pocket such as stamp duty and other search charges, but be sure to ask detailed questions about exactly what a lawyer charges for what services.
Do not be afraid to walk out of a meeting if you think that the lawyer is out to take advantage of you by piling on endless fees and might have deliberately quoted you a low price just to get you to the meeting. It can be quite stressful and time-consuming to attend meetings with lawyers over these issues, but that is the cost of getting a good deal.