August 20 2018
People who have secured a mortgage know that banks often sweeten the deal by providing a contribution towards legal fees. But how much are legal fees for a property transaction and why aren’t they a standard amount? We know people aren’t always comfortable talking about lawyers’ fees. Here’s how it all works.
Firstly, there’s no need to feel concerned about asking your lawyer to explain their fees. The law oftens presents us with many considerations, even in situations like a property transaction, which may seem to be a straight forward process. Our aim is to be fair and reasonable and to give you a trouble free transaction. That requires expertise, asking the right questions and doing the right checks so you don’t find yourself in an unexpected and unpleasant situation in the future.
Always ask for an estimate
An estimate may not be a quote, but it gives you a good indication of costs and if there are any variations, we can tell you what these are as they arise. Estimates are based on our fee, disbursements and office charges. Remember to ask for this as a GST inclusive estimate. Here’s a breakdown of what each of these charges entails.
1. Our fee
Even though it may seem like a simple process, there’s a lot of work done behind the scenes to ensure a smooth property purchase.
First, we do a title search. This is to identify any legal documents registered against the title which may affect the property and your ownership of it in some way. We’re sure you’d rather find this out before than after the sale.
Next, we review the sale and purchase agreement. If you haven’t read our article about why you shouldn’t sign this agreement until after we’ve seen it, then we recommend you look at it too. This review allows us to add any specific conditions you want to include before you commit to the sale, especially to protect you through the conditional stage.
From there, we take care of fulfilling the conditions by the required date and negotiate on your behalf if anything changes. Once the agreement goes unconditional, we ensure your lender has the right documents to register your mortgage. We also get the property transferred to your name with Land Information New Zealand.
Finally, because you’re dealing with a significant sum of money, we handle the funds to ensure the transaction is completed. This is done on settlement day.
If we incur a cost on your behalf, we add these to the bill for reimbursement. These are disbursements and it is easier for us, and more convenient for you, if we pay these as required. Two examples are the fee we pay to LINZ to register your name on the title, and the fee to register a mortgage against your property in favour of your lender.
3. Office charges or office service fees
Sometimes we charge an office service fee. As much of the process with property transactions is now done online, this covers IT, software licensing and other similar costs.
We work for you
As your lawyer, we are totally transparent in all our dealings with you. We have to act according to your instructions, give you the best advice for your situation and keep you up-to-date with progress. When the work is complete, we send a formal reporting letter which details our fees, disbursements and any office charges.
Please ask us for a cost estimate if you’re buying property. We welcome any questions you may have about the process and the work we do to ensure everything runs smoothly.