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Validity of extra charges from real estate attorney. What is a typical case and what is not?

Dayton, NJ |
Filed under: Real estate

I am under contract to sell my property. My attorney claims my file is "too thick", and so she will charge a few hundred dollars extra. Her agreement with me states that she will charge extra if my case is "unusual". I don't know what is normal and what is not. So for some background: (1) The house had inspection issues, which the buyer and I negotiated via email (she and buyer attorney were on the cc and they forwarded each email back & forth) . (2) The contract had an appraisal clause that allowed re-negotiation of the sale price if the appraisal came in low - which it did. There were about 4-5 days of negotiation which generated several emails. For those in real-estate law, do these two factors look unusual enough to warrant extra charges? Please advise.

The transaction involves a residential property. The property was rented out for the last two years, and has been vacant since May 2013 being for sale.

Attorney Answers 4

Posted

In New Jersey, attorneys handling residential real estate closing generally charge a flat fee and the only extra charges are for out-of-pocket expenses, such as filing fees and postage/delivery. However, for commercial real estate closings, some attorney's may charge an hourly fee. Since the question does not specify what type of transaction is in question, it is impossible to give more specific answer.

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Asker

Posted

Thanks for the quick response! For clarification, the property is a residential property. Although I should also add that it was rented out for the last two years due to the fact that I had to move due to a job change.

Layni S Rothbort

Layni S Rothbort

Posted

Upon re-reading the question, I do see that the property is referred to as a "house", so it would be a residential closing, which would usually be a flat fee. In my 28 years of practicing real estate law, I have never charged any client more than the flat fee I originally quoted (plus expenses)

Layni S Rothbort

Layni S Rothbort

Posted

Not have I ever seen any other attorney charging additional monies. As an attorney, sometimes you get a deal that ends up being very easy which closes with very few complications and you end up thinking to yourself: "That was an easy way to earn a fee!" Other times, a deal gets so complex that once it actually closes you are kicking yourself for not charging the client a lot more! I like to think that in the end everything evens out and over my career I will earn what I am supposed to earn.

Posted

Were you contracted for a flat rate for services? Or was it an hourly...perhaps with a cap on total fee? How are the rates for "unusual" transactions calculated....hourly?

Lawyers charge for their time..."unusual" cases take more time. So it really is a function of what the original fee is and what the new fee is. Are the fees related...meaning are they proportional for the extra time and effort?

At the end of the day, you seemed locked in to the transaction and will have to pay the fee to get the attorney to complete the service. If the attorney fee seems out of proportion from the original quote, you can always contact the local bar association

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Posted

It was an interesting chain of events. I called her first and she said a flat fee. Once the contract entered attorney review, that's when I got a letter saying that there would be a charge for unusual cases. Can I simply pay up now, and dispute the charges after closing?

Michael A. Berman

Michael A. Berman

Posted

Setting a fee and then changing it seems like "dirty pool" to me....you should have been informed as to the method of charges prior to finalizing engagement. From the additional detail, your choices seem to be: Pay up, and hope you get some satisfaction afterwards Fire her and get someone to finish the job

Asker

Posted

Indeed. She tells me that if she charges hourly for all the "extra" work, the bill would run into the thousands. And she is threatening to charge the time for the discussion of the fees as well!

Michael A. Berman

Michael A. Berman

Posted

We can always discuss this privately, as a free consult, about your options concerning the other attorney. My e-mail is 219race@comcast.net Mike

Posted

Many attorneys charge a flat fee, some obviously higher than others. Those on the high side might not charge for extra work (taking the good with the bad) where those on the low side might.

How much is your attorney's fee? $750? $1,500? Somewhere else?

In case it helps, I'd like to point out that there are other "unusual" factors for which *some* attorneys might charge extra. Don't know if any of the following apply, but in case it helps, here are a few:

- Unsatisfied prior mortgages
- Mistakes on the last deed of record
- Life estates in title
- Divorcing sellers
- Judgments/liens against the property or the seller
- short-sales
- homeowners associations

Disclaimer: (1) I may be guessing and/or not even licensed in your state; (2) We have not established an attorney-client relationship; (3) Sometimes you get what you pay for; and (4) If you want to send me a gift, my favorite color is orange.

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Posted

Thanks Peter, none of the above applies (at least not yet). The total charges including padding up come to about $1600. I was initially quoted slightly less than $1000.

Peter J Weinman

Peter J Weinman

Posted

Sorry I could not be of more help. It's hard to second-guess not having seen the file and not knowing all the issues. You should probably sit with her and ask her to define "unusual" to the extent of such a large increase. Good luck!

Posted

While most attorneys in NJ charge a flat fee for real estate transactions, I have seen where an attorney will charge an extra fee for "extraordinary circumstances" - such as removal of an UST and escrowing for an NFA letter from the state - or escrowing for judgments and liens that appear on a run down search and must be cleared post-closing.

If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.

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Posted

Thanks to all for the answers.

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