Lawyer's fee when Selling? and when Refinancing?

[RE123RE]

Hello,
Say the lawyer's legal fee when buying a single family home is around $1000.
What is the fee when selling the same property? The same, also around $1000?

Same question regarding an apartment buildings. What is the legal fee to Sell say a 10-plex?
The same as SFH or double? Around $1000 or around $2000?

Lastly, legal fee to Refinance an apartment building costs the same as selling? or usually much less?

Thank you

 

[Thomas Beyer]

Budget $10-12,000 .. namely $5-6000 times two .. one for you and one for the lender's lawyer that you will pay as the borrower.

Refi is only a little bit cheaper, roughly 10-20% of your lawyer's bill as you do not deal with titles. All other expenses usually apply again, unless bank allows you to reuse a five year old report which they sometimes do, say an environmental report that was clean.

Add $10,000 or so for the usually required reports: appraisals ($3000), engineering report ($3000), environmental ($3000), plus a few incidentals ..

In you're under $20,000 for a buy you're doing good. Have $25,000 handy to be safe. We're just closing on a 3 park mobile home park package and had some phase 1 issues so a phase 2 was required. All in bill about $60,000.

Plus land transfer taxes in BC and ON (soon both going up likely). Not (yet) in AB nor SK !

 

[RE123RE]

Refi is cheaper, roughly half that as you do not deal with titles.

Thank you Thomas for confirming this.

Budget $10-12,000 .. namely $5-6000 times two .. one for you and one for the lender's lawyer that you will pay as the borrower..
Add $10,000 or so for the usually required reports: appraisals ($3000), engineering report ($3000), environmental ($3000), plus a few incidentals ..

In you're under $20,000 for a buy you're doing good. Have $25,000 handy to be safe. We're just closing on a 3 park mobile home park package and had some phase 1 issues so a phase 2 was required. All in bill about $60,000.

Regarding the amounts you mentioned - Maybe when you buy in the millions or take out $250K ++ as part of a refinance.
Many investors are happy to take out 100K from a small 1 million apartment building. Believe me they do not pay the amounts you do but rather much less. Otherwise no one would refinance a 1 Million Dollar building/10-plex.
I understand you paid the amounts mentioned (maybe sometimes being taken advantage of) .
The amounts you mentioned do not make sense for smaller, but still commercial, investors.
Example: for a recent 1.5 Million 20-plex, partner paid less than $10K for an appraisal, lawyer and mortgage fee combined. Had he needed an engineering report, it would still be 10K in total.
Who told you $25K is normal for a 1-2 million dollar building. Maybe for a 5-10+ million building(?)
Regards

 

[Thomas Beyer]

Yes smaller buildings are somewhat less, but not proportionally so. An appraisal of a $2M or $6M asset is almost the same as is an engineering report or a lender's lawyer.

 

[RE123RE]

lender's lawyer.

Lender's lawyer?
Again, smaller buildings do not typically pay that. In fact, I never had to pay that, not even for the few small apartment buildings purchased.
Oh.... maybe I know why Thomas. Just recalled from a different discussion in which you participated - you deal with mortgage brokers, often Not with any of the top 5 big banks, right?
Well, we work only with big banks, at least so far that is what we have been able to do successfully.
Had you worked with the biggest banks in Canada, your (sorry) HUGE fees would probably be (my guess) cut by half, if not by two thirds(!) by having big banks not require/wave (not always but sometimes) your need to provide both Many and Expensive reports.
Thanks

 

[Thomas Beyer]

Commercial mortgages over 6 units always have a separate lawyer, that you, the borrower will pay. I haven't seen a bill lately under $5000, each.

Also, I corrected my refi comment above. A refi is NOT much cheaper, only a little bit on your lawyer side as less title related work is required, and almost all the same reports have to be re-done.

 

[RE123RE]

Commercial mortgages over 6 units always have a separate lawyer, that you, the borrower will pay. I haven't seen a bill lately under $5000, each.

Ok thanks. Never seen one over $3000. Actually never seen one. Tried to explain why above. Maybe when you assume the seller's mortgage you pay none. Let's summarize - it depends on the deal and the bank.. maybe how you dress. come by bus, hide your watch or get a less than perfect suit

Also, I corrected my refi comment above. A refi is NOT much cheaper, only a little bit on your lawyer side as less title related work is required, and almost all the same reports have to be re-done.

Thanks

 

[Thomas Beyer]

I am using 15 or more units as base assumptions here. Yes when you assume a mortgage the fees are lower as the mortgage is on place already and lender merely states " ok to assume " after some asset and personal financial checks usually.

But you are right, maybe I should shave less and dress down and look in dingier parts of town for legal assistance ...

 

[RE123RE]

But you are right, maybe I should shave less and dress down and look in dingier parts of town for legal assistance ...

Ha ha. You are right too - as you grow your business you are less on top of things. Can still be on top.. but less. And that's normal.

 

[KhoaN]

Hi guys,
On the same topic, I just bought a 12 units building and I had to pay for seller's lawyer fee as well, is it normal? This is my first time buying MFH and my realtor never mentioned about this until my lawyer told me that buyers normally pay for sellers' lawyer fees?

 

[Thomas Beyer]

Hi guys,
... my lawyer told me that buyers normally pay for sellers' lawyer fees?

That is utterly untrue, unless it is specified in the contract. You may wish to switch lawyers or certainly have a word with him and ask him to push back hard on seller's lawyer.

What does your contract state here ?

If you want to push it report this to the bar association as it is not normal that you pay for seller's lawyer as their lawyer is INdependent. Maybe he is scamming you ?

 

[KhoaN]

Thanks Thomas!
I'm waiting for some clarifications from the lawyer.

 

[DonnaMcGuire]

Hi guys,
On the same topic, I just bought a 12 units building and I had to pay for seller's lawyer fee as well, is it normal? This is my first time buying MFH and my realtor never mentioned about this until my lawyer told me that buyers normally pay for sellers' lawyer fees?

Khoa, did you maybe confuse the lender's lawyer's fee with the seller's lawyer? It is common to pay the lender's legal...

 

[KhoaN]

Yes! The lawyer just emailed me back clarifying that it was lender's lawyer fees, i got it mixed up. Learn new thing everyday