Podcast Episode 19: “Taming Your Legal Bills 4/4 – Dos and Don’ts.”
The conclusion of this podcast mini-series on legal fees finishes up with some miscellaneous advice on saving money. Real estate law is complex, but there’s still a lot you can do to make your lawyer’s job easier, which will cost you less!
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What Else Can I Do to Save Money on Lawyers Fees for Real Estate?
- Do Your Own Negotiating: Absolutely. Donald Trump doesn’t fix toilets or collect rent, he negotiates deals. Our most successful clients are really good at negotiating. They look at situations differently and, I think, often do a better job. If possible, negotiating for yourself is certainly less expensive than having your lawyer do it for you.
- Use Off-The-Shelf Contracts: Again, absolutely. If it’s off-the-shelf, you know what you are doing, you have read and understood the contract, and you know it works, then you’re not spending money on lawyer drafting time. For residential real estate transactions, the classic contract to use is the most current offer to purchase/offer of purchase and sale/real estate purchase contract (different provinces call the contract different things) approved by the provincial real estate association. Your realtor will be using that form and will, if you have a good relationship, usually provide you with copies of the form for your own use. It’s way easier for us as lawyers to review a contract for you when all we have to do is look at the blanks and the schedules because we know what the rest of the contract says. Self-Counsel Press (available at most bookstores and Staples) produces decent off-the-shelf legal documentation.
- Don’t Draft Agreements From Scratch. There’s no need to go into this in great detail. Leave this kind of stuff to your lawyer or else it may take twice as long—costing twice as much—to make sure the contract is effective.
- Don’t Tweak, Or Be Very Careful Tweaking, Old Agreements. We often see agreements come in where it is just so obvious that someone has taken a piece of this contract and a piece of that contract and a little slice of another contract and put them all together in what we call a ‘Frankenstein’ contract. Stitched together, just like Frankenstein. There’s way too much chance that the parts do not make a whole.
- Don’t Be A Lawyer (with some exceptions): You can probably do some of your own searches at the land titles office or other registries, but be careful with interpretation. Avoid probating a deceased person’s will unless you have lots of time on your hands. For bankruptcy matters, you are usually making a bid to a trustee disposing of a bankrupt property. This is generally all right, although you might need help closing the actual purchase. It is generally okay to represent yourself in Small Claims Court. But stay out of the Superior Courts. Be careful acting as your own registered and records office for your corporations. Our experience is that one in 50 clients is able to handle the administrative detail. Then, when you sell a business or get a loan or need to do refinancing, lenders want legal opinions on the state of your corporation. That’s when you bring your minute book and other records to us so we can give that legal opinion. Generally, you end up spending twice as much to have us straighten out issues as you would’ve spent by paying our yearly fee to keep your corporations in good order.
- Book A Consultation: For larger fixed-fee deals such as multi-family purchases or corporate planning/reorganization, a consultation with your lawyer can save you a ton on legal fees. Your lawyer may or may not charge for this consultation. The idea here is that for these much more complex situations, you talk to your lawyer about potential problems, diligence, structure, timing, tax issues, etc. before you are in the middle of the deal when it’s usually too late.
- Avoid Litigation: I can’t stress this strongly enough. Litigation is always stressful, expensive, and time-consuming. Even when our clients ‘win,’ the stress, money, and time spent at the scene doesn’t seem to be worth the victory. We think you are way better off spending some money to structure your deal properly to start with. If things go wrong and the battle starts, you are almost always better off doing whatever it takes to make peace and move forward.
Folks, will following these tips guarantee a virtually no-cost real estate transaction? Of course not, but they will certainly help you have a more straightforward, no-stress experience.
Whether you need a consultation or help with amending off-the-shelf contract, Barry is the real estate lawyer you need. Contact him today!
“Home Yellow” stock image by nikcname. Used under Creative Commons Attribution Generic 2.0