When can Buyer`s Lawyer also Represent the Bank? Lawyer`s Fee - Bank VS. Buyer?

Nir

New Forum Member
REIN Member
Hi,

When a lawyer represents both the buyer and the bank in a new purchase or refinance, does it double his income more or less? For the buyer, lawyer's fee is around say $1000 for a small property. does the bank pay the lawyer around the same amount or usually more?



What are the circumstances allowing your lawyer to represent both you and the bank in a transaction?

that there are no more than 6 units? are there cases where lawyer can also rep. the bank on an apartment buildings? is the decision to allow the buyer's lawyer to rep. the bank, bank specific, lawyer related or property related?



Always good to help your team members... where possible.



Thank you and regards,

N.
 

WadeFenner

Inspired Forum Member
The bank doesn't pay the lawyer you do. No additional fees to the bank.



Not sure on a multi but with single family homes this is the case.
 

RedlineBrett

Senior Forum Member
REIN Member
When you are borrowing you pay for everything the lender requires to be satisfied with the deal including the bank's legal fees.



On residential mortgages the bank will use the buyer's lawyer to save the buyer some money. They will have you sign a disclosure and conflict of interest agreement when you go in for closing.



On the commercial side the banks generally have their own lawyer but they send you the bill for that too. I paid the lender's lawyer ~$6k + disbursements for the multifamily deal I just did.
 

Thomas Beyer

Senior Forum Member
REIN Member
[quote user=investmart]What are the circumstances allowing your lawyer to represent both you and the bank in a transaction?


When the bank allows it .. which is most common in straight forwarded re-fi's or new mortgages as standard contracts are used .. i.e. a volume business.



In a commercial transaction, or more complicated mortgage situation for a single family property (say 1st in arrears, plus a 2nd, plus liens ..) the bank will have their own lawyer .. and YOU the borrower, pay for it !
 

Nir

New Forum Member
REIN Member
What is the expected bank's lawyer's fee that the buyer has to pay for a 20-plex say all residential units?

Approximately $2000 OR closer to $5000? THANKS.



* Is this kind of fee negotiable? I mean what prevents the bank from asking say $6K where it should cost only $2K? (well, good luck proving that :) )

** When in the process will the lawyer's fee be estimated for the buyer? included in the mortgage commitment, earlier or later?
 

Thomas Beyer

Senior Forum Member
REIN Member
[quote user=investmart]awyer's fee that the buyer has to pay for a 20-plex say all residential units?


Approx. $3500 to $5000 PER LAWYER .. one that closes the transaction on your behalf .. and the 2nd one acting for the bank to release $s once all conditions are met !



Plus about 1% of the loan amount to mortgage broker for handling the arrangement of the mortgage .. plus a lender commitment fee of 0.2 to 0.5%



Plus $2500 to $5000 per report for the following reports

a) appraisal

b) engineering report

c) Phase 1 environmental report



So, budget about $30-33,000 in closing costs for a typical 20 suiter for $1.6M with a $1.2M mortgage (80/door if you can find one at that price)!



Plus up to 3 months of deposits for new utility accounts (gas, electricity, water, ..) , plus renovations/holdbacks that are not uncommon as the bank will require immediate fixes to anything flagged by the engineering report !!



So if the roof needs replacement (about 40-60K) or the hallways carpets are real bad (maybe 12K) or the boiler is 30+ years old (about 20K) or the balconies sag (from 20-70K) .. then the bank will not only require this work to be done but often withholds those funds from the mortgage proceeds until you fix them, then releases them, sometimes estimated costs + 20% !



Plus budget a few bad tenant apples that almost always need eviction and a complete suite renovation.



Hence, thorough due diligence on property condition and a fairly precise 5 year revenue & cost estimate is critical.



More on this June 18/19 in Toronto where I will be speaking 2x at the REIN multi-family event and would be happy to meet and answer more questions !
 

bizaro86

Frequent Forum Member
Registered
[quote user=ThomasBeyer]So, budget about $30-33,000 in closing costs for a typical 20 suiter for $1.6M with a $1.2M mortgage (80/door if you can find one at that price)!




So basically ~$1500 per door for a 20 suiter. I find it interesting since that's what I just paid in legal/closing for a condo (aka a 1 unit apartment) that was a foreclosure. (So I also paid for my own estoppel certificate, and the bank required title insurance since it was a foreclosure)



Regards,



Michael
 

Nir

New Forum Member
REIN Member
Thank you Thomas!

Excellent summary of the expected legal fees as well as other closing related expenses.
 
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