My lawyers fees are higher than expected. Why? How much should it cost? 🏠 FIRST HOME QUESTIONS 🤷♀
Hey Sam,
Oh, I’m so sorry! This should be a really exciting day, and it sounds like you’ve got a nasty shock instead.
But I’ve got good news for you. When you told me that your fees were almost double what you were quoted, the alarm bells went off. It’s a huge breach of ethics for a lawyer to increase their fees by that much with no warning. So huge, in fact, that unless you’re using Shonky & Cheatem, who operate out of your local coffee shop and only take unmarked bank notes, it’s pretty unlikely to happen.
So I asked you to show me the final invoice, and…Samara, mate, there are two issues:
- You were quoted $1400 not $700. We’ve all been there—you hear one thing but remember another. There’s a LOT happening in the first meet with your solicitor as you go through all the contract details. Easy mistake.
- You’ve misread it the paperwork you receive on settlement day. You won’t be the first person to do so, or the last.
What you’ve been sent is a settlement statement. It details what the seller spent (e.g., on building reports) that you reimburse, what you spent, and also how the seller wants their funds disbursed.
In some cases, that’s just going to be one cheque. They receive their purchase money and then pay people later. Here, they’ve asked your solicitor to issue multiple cheques, including for the payment of their lawyer. The seller is paying for that extra work.
The $1900 figure you’re concerned about is partly your costs (the $1400 you were quoted for) and partly the costs paid by the seller. The seller’s portion has been deducted from the contract balance that pays for the house. Your costs are still only $1400.
With that out of the way, here’s the answer to your original question.
How much are conveyancing solicitors’ fees when you buy a house?
Average costs for an ACT purchase start at around $700 and can be as much as $2000.
Often, cheaper quotes are for a more basic service, with additional add-on costs. Some solicitors may include services like registration of transfer and discharge of mortgage in their baseline price. Others may charge these as extra.
When you’re getting quotes, make sure you understand what’s included and what isn’t. I’ve definitely come across people who were blindsided by the final bill because they didn’t understand this bit.
Why are my solicitor’s fees are higher than quoted?
You also asked whether settling two days early and sending a couple of emails should have made the cost skyrocket. No.
Firstly, a conveyancing solicitor has baked a standard amount of back-and-forth into their quote. When they quote you a flat fee, they’re assuming that they’ll have to email or call you a number of times to keep you up to date. A couple of extra emails is well within the norm, and shouldn’t cost you extra.
Secondly, if a conveyancing matter does become a lot more costly, your lawyer should let you know. Lawyers are required by law to disclose how much they charge, how they charge (i.e., flat fee, hourly or another way), and how much the matter will cost. If they can’t tell you an exact cost, they have to estimate it.
If there is likely to be an increase in the quoted fee or estimate, they are required to tell you as soon as practicable.
Most conveyancers will have a caveat in their quote that says something like “if the matter becomes protracted, extra work will be charged at $X per hour”. That’s to cover them if it turns out that the house you’re buying actually doesn’t belong to the person claiming to be the seller, and you’re all suddenly plunged into a complex estate dispute involving a long-lost heir with a mysterious past.
(It also covers them in case you turn out to be the sort of client who sends emails on the hour, every hour, requesting lengthy updates, and then leaves five messages in a row if they’re not responded to within minutes. Those are more common that the long-lost heir, to be honest.)
What can you do if your lawyer’s fees are higher than expected?
You did exactly the right thing here. The first step is to ask for more information about any charge that doesn’t make sense to you. Often that solves it.
If it doesn’t, you can make a complaint about your lawyer. The place to go is the Law Society of the ACT, which handles these cases.
Hopefully you’ll never have to do this. But I hope it helps anyway. And congratulations! You’re a home owner now!
TAKEAWAYS
- Settlement statements aren’t a bill for costs. They list the cheques your solicitor needs to write out, but if that’s something the seller should be paying for (like their solicitor’s fees) then the cost comes out of what you owe for the house
- Conveyancing solicitors charge between $700 and $2000, but make sure you’re comparing like with like
- If the cost goes up significantly, your solicitor must let you know as soon as possible - not wait to surprise you with a huge bill
- Always ask for clarification before making a complaint. It might be a simple misunderstanding
FOLLOWING SAMARA'S JOURNEY?
See the rest of her questions
The Ultimate First Home Buyer email course
Not sure if you're ready to buy? Got a deposit but no idea what to do next? Take our 5-day email course for first home buyers. We cover:
> How much $$$ you need
> How to choose a property
> How to get a loan
> The process of buying
> What happens between offer and settlement