Attorney fees in real estate are always under review. Whether under the eye of a short sale negotiator at a bank or a discerning consumer, the attorney fee is heavily scrutinized, but should it be?
It is important to understand the history of attorney fees in real estate. In the Chicago and Chicagoland area, one percent of the purchase price was used to establish pricing for the attorney fee in a real estate transaction. The fee was price based. According to the United States Census Bureau, the average home in 1970 was about $25,000.00, in turn, the average attorney fee in 1970 was $250.00. The next decade, the average home value increased to low six figures, while the attorney fee increased nominally to the three to four hundred dollar range; however, no longer was the attorney fee tied to the purchase price.
After the purchase price driven model was set-aside in the 1980’s, in the 1990’s, some attorneys nominally increased their fees to the 500-dollar range. Fortunately for the consumer, the attorney fees have remained at 1980/1990 pricing for the last 36 years while the workload per transaction and closing times, third party costs, and staff / office costs have grown year after year.
The residential real estate attorney fee in Chicago is typically a flat fee, per service flat fee, or a hybrid of flat fee contingency; however, even though the fees are charged this way universally, the level of service provide is not universal. Therefore, it is not the fee that should be scrutinized, it is the service provided by your attorney or law firm that should be scrutinized.
There are solo attorneys without staff that practice in various areas that may or may not focus in real estate that charge the same as attorneys with lay support staff that handle the transaction from start to finish, those with lay and attorney staff that assist, or in the case of our office, an all attorney staff. The flat fees charged in these cases may or may not vary and if they do, it is usually marginally, but the service, experience, and support staff, as you can see, vary drastically.
There are offices that do not maintain office hours because they do not have an physical office or work from home, those that maintain partial or regular business hours, or those that have regular business hours as well as extended business hours and weekends. We maintain the last model at our physical office space located at our main office at 2510 W. Irving Park Road, Unit A, Chicago, IL, 60618 with extended business hours and work days.
There are offices that use title company or third party clerking services to handle your matters and fees or offices that maintain their own clerks to handle your matter—we maintain the latter. We do not pass your fees onto other entities or parties; any fee paid on your behalf is by our office.
There are offices that focus in all areas of the law or other types of law besides real estate that will work for you, offices that focus in real estate, or offices that focus in real estate and include short sale service. We are the latter, we offer representation to developers, buyers, sellers, and short sale sellers and refer out other matters to those that focus in the area of law you need. We provide this without charging upfront or retainer fees—another distinction in service that we provide—even though, in short sales; the workload is 10 to 20 times more than a traditional transaction. The fee then is submitted to the short sale lender, who typically forces our office to discount our rate, but this amount is never billed to our clients.
There are drawbacks and benefits of all these models. Throughout the years, our office has grown and outgrown many of these models to bring us to our current achievement, a collaborative attorney team with a manageable workload that allows extensive experience and ease of access for clients at low flat fees. It is our opinion that the client is best served with an attorney that focuses in real estate and with a support staff that includes some or all attorneys. This is similar to our office. Our office is always a work in progress and we strive to grow and improve the experience for the client every day.
The winner in all this is the consumer that for the last four decades has enjoyed the low attorney fees in real estate transactions.
To the consumer: Get the most out of your dollar! Ask these questions:
1. Does your attorney have support staff that can assist you if they are busy with closings, clients, vacation, or just life?
2. Is the attorney full time? Is the staff full time?
3. Is the support and clerking staff exclusive to the law firm? Are they attorneys?
4. What are business hours and days?
5. What type of law does your office provide representation on?
Make sure that you are working with a full service firm such as ours to help you achieve your real estate dreams and goals. Contact us today to assist you at firstname.lastname@example.org or at 773-539-5970 for assistance buying, selling, short selling, and developing, or with land trusts quit claim deeds, and more.
 Changes to the mortgage monitoring provisions of the contract has tripled the workload just in the last few years alone.
 The average title company costs and lender fees are about 1500-3000 or more each whereas the attorney fee is on average $600—a bargain for the consumer.
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Law Office of Theresa L. Panzica LLC to sponsor Realty of Chicago's Turkey Giveaway for the third year in a row.
In the true spirit of the Thanksgiving holiday, I am honored to partake in this wonderful event for the third year, Realty of Chicago's Annual Turkey Giveaway. Please join us or share with your friends and family, I hope to see you in Berwyn on November 21, 2016, at 3pm.