I bought (closed on) my first home last month. The $950 fee is pretty good, because all the lawyers I talked to charged between $1100 and $1300! That was in Suffolk, by the way.
I picked a lawyer when I first started looking for a house 8 months ago because I knew I'd need one as soon as a seller accepted my offer.
Everyone gets the house inspected before contract. That way if something bad shows up you know right away whether you want the house, or if the seller is willing to either fix the problem or reduce the price, without having had to take money out of your bank account for the down payment (you have to give them like 10% of the price when you sign the contract).
I just re-read your post and saw you said the house is a short sale. Has anyone explained to you what that is???? I was warned by my lawyer and my real estate agent and several people I work with to stay away from a short sale because they are usually a nightmare even though they can be cheaper to buy! Your money can be tied up for months waiting for their bank to decide whether they want to sell the house to you!