When comparing apples to apples, the first question to ask (which is often forgotten) is – are these both apples? In this day and age, things are rarely obvious and apparent. There can be several differences between real estate conveyancing quotes which, once examined will show that one quote is rarely the same as another.
Case in point – Angela, a new home buyer calls two firms to receive a quote for a purchase and a mortgage. Firm A gives Angela a quote of $2,150.00. Firm B gives Angela a quote of $2,550.00. There appears to be a big difference in these quotes with Firm A, being the apparently better choice.
When reviewing these two different quotes there are three key questions to ask, to analyze the quotes:
- Does this quote include all fees, taxes and disbursements?
- Does this include your time to review the contract and title before subject removal?
- Does this quote include all expenses that may show up the buyer’s statement of adjustments?**
First important question to ask – is this quote just fees? Will taxes and/or disbursements be added on top?
Secondly, does this quote include time for the law firm to review everything before subject removal. Many firms do not review title prior to subject removal, or if they do, they have a separate charge for this above the quote for the purchase transaction. This could be anywhere from an additional $150 to $500 depending on what is being reviewed plus the out of pocket expenses for searches.
Thirdly, in the Okanagan there are 2 different quoting strategies that are utilized. One is to include absolutely all disbursements and expenses in the account (in the above noted quote), and not include any additional expenses on a buyer’s statement of adjustments (BSOA). The other, is to include some disbursements in the account, but then include some disbursements on the BSOA, which calculates what the buyer needs to bring into close the transaction.
Typical offenders that could be added to the BSOA (and not included in the quote provided) are:
- Document Preparation Services (can be up to $219);
- Strata order fees (can be $50-$400, depending on rush fees);
- Tax Certificate fee (approximately $50)
- Insurance Binder request (up to $75)
- Title charge retrieval pulls, from the title review (anywhere from $15 to $400, typically)
For the sake of argument, lets assume Firm A does not include any of the above in the quote AND does not include the reviewing of title/contract in their quote. Let’s also assume that Firm B includes everything in their quote.
If the client goes with Firm B, the $2550 will be the final cost to them.
If the client goes with Firm A, the following additional charges will be passed onto the client:
$200 – title review
$199 – Document preparation cost
$100 – Strata form cost
$50 – Tax Certificate
$50 – Insurance Binder Fee
This then means that the final cost to the client for Firm A will be: $2150 +$200+$199+$100+$50+$50 = $2,649.00. In comparison to Firm B’s $2,550.00.
It is clear once you crunch the numbers, that comparing a quote $2,150.00 to a quote of $2,550.00 is like comparing an apple to an orange. They are not both apples and cannot be compared without more information.
This is why at Acorn Law we love to be asked about more information on our quotes. When we give a quote, our quote includes all fees, taxes and disbursements so that clients know exactly what to expect and budget for. Surprises are great for birthdays and anniversaries, never on closing days! The only item not included in our quote would be title insurance (as this is dependent on both the lender and the buyer, on whether it is required). Our quotes also include our time to review the contract and title prior to subject removal. We believe this is such an important part of the process that all clients should have it done. Truly – a good review can save a lifetime of headaches.
If you have any questions about our real estate pricing or processes, please do not hesitate to reach out at 778-940-3768 or [email protected].
Author: Jennette Vopicka
This information is general in nature only and should not be considered as legal advice. The above content does not create a lawyer-client relationship and is not an invitation to send us unsolicited confidential information. You should consult a lawyer before acting on any of this information. To learn more about your legal needs, please contact our office at (778) 940-3768 or any of our top-notch lawyers:
Danielle (Dani) Brito: [email protected]
Jennette Vopicka: [email protected]