Two firms quoted my 4-unit closing very differently. Buying what?

You're treating this as one purchase when it's three separate pieces of work, and that's why the quotes don't compare.

Piece one is the closing itself. Deed, settlement statement, recording, title clearing. Your volume attorney does this all day and $1,850 flat in an attorney-closing state is a normal price. Speed and repetition are actual virtues here.

Piece two is the entity and the operating agreement. A $300 form and a $2,500 agreement differ on what happens when something goes wrong between you and the money. Transfer restrictions, what a capital call looks like and what happens to someone who doesn't fund it, how a deadlock breaks, who can sign for the LLC. If you're the only member the cheap version is closer to adequate. You mentioned a partner, so find out whether he's a member or only the lender, because that changes what the document has to do.

Piece three is the private lender's note and security instrument, plus whatever reporting applies to a non-financed transfer into an entity. That's the piece your first attorney has not engaged with, and the second firm did within 20 minutes.

Split it. Two firms on one file is normal when the scopes don't overlap. Send both a one page scope in writing saying exactly which documents each is responsible for, and ask each to confirm in writing what they are not doing. The gap between two lawyers is where files die, so make somebody own the closing date.

Also ask the second firm for a fee cap, not an estimate. Hourly estimates on structuring work run over as a matter of course.

canton's split is right and I'd add one thing, keystone. Ask the second firm whether the operating agreement they'd draft is a form they modify or something they build from the deal. Both are legitimate. The price should tell you which, and often it doesn't.

Coming from the trades I read this as the difference between a guy who frames fast and a guy who reads the plans. You need both and they cost different money. What I don't get is why the fast one didn't mention the reporting rule at all. Is that normal?

@solder it's normal in the sense that a high volume residential attorney is set up for owner occupant purchases where that rule mostly isn't in play, and the title company he works with does file the report on the transfers where it applies. It's still a flag. If he doesn't raise it, keystone has to raise it, and keystone is the one with the exposure.

I've gone through this a couple of times and one basic thing still isn't clicking. Why does it matter that the private loan closes after the purchase rather than at the same time? Does the order change which rules touch the deal?

@juniper because that rule keys off whether the transfer was financed by a loan from a covered institution at the time of transfer. A purchase that funds with cash and then gets a private loan recorded afterward can look like a non-financed transfer for that purpose, and private lenders often aren't the kind of institution that takes it out of scope. Whether keystone's particular sequence lands inside or outside the definition is a question for his attorney, and it depends on the actual documents and dates.

Different angle. You're closing a 4-unit in five weeks and nobody has asked about the existing leases. Who is reviewing the estoppels, the security deposit transfer, and whether the deposits are held the way your state requires? Deposit handling rules vary by state and getting them wrong is a real penalty. That's cheap attorney time and it's not in either quote you posted.

I'd pay the $5,400 and not split it, personally. Not because the second firm is better, I have no idea if they are. Five weeks with two firms and a private lender means someone has to coordinate and that someone is you, on top of the leases trellis just raised. I'm slow by nature though and slow costs me deals.

@anchor there's a version where paying one firm for everything gets you a $5,400 bill and a closing attorney who has never recorded in that county. Local recording practice is genuinely local. I'd ask the second firm how many times they've closed in this county before deciding they can cover both.

Ask the second firm for the operating agreement's transfer and buy-sell sections before you engage. Some will send a redacted sample. If the buy-sell has no valuation method in it, the document is decoration.

And on the reporting piece, the answer you want in writing is one sentence naming the filer and the deadline. Everything else is conversation.

$2,500 for a document you may never open again feels bad until the year you open it. That's all I've got.

@trellis point is the one I'd chase first because it has a hard date attached. Estoppels take forever to come back in my experience and you're at five weeks, keystone.