Importance of Hiring a Real Estate Attorney
Real Estate Closing is the final step in executing a real estate transaction. The closing date is set during the negotiation phase. On the closing date, the ownership of the property is transferred to the buyer. In most jurisdictions, ownership is officially transferred when a deed from the seller is delivered to the buyer. Lenders providing a mortgage loan will often require a title search, title insurance, appraisal, land survey, and attorneys to be involved.
- The buyer and/or their lender deliver a check (a cashier’s check or wire transfer) for the balance owed on the purchase price. The seller signs the deed over to the buyer and gives it to the buyer. A recorder’s office, which would record the deed, requires the seller’s signature to be notarized. A mortgage will also be recorded (if applicable).
- The seller delivers possession to the buyer. Unless otherwise specified in the real estate contract, the delivery of possession should be at the closing.
- A title company, lawyer, notary, or the buyer registers the new deed with the local land registry office/recorder’s office. A declaration or statement by the buyer or seller regarding the purchase price may have to be filed with the government. Conveyancing taxes and recorder’s fees will typically have to be paid, which are part of the closing costs.
- The seller receives the amount of money through a check or bank transfer for the proceeds of the sale, after the deduction of closing costs and mortgage payouts.
- From the funds allotted for closing costs, prepayments of real estate taxes and insurance may be required, and fees charged by other parties may be paid, such as real estate brokers/agents, title companies, lawyers, etc.
It is common for a transaction to close on one day but possession to occur at a later date. The buyer rents the house back to the seller during the interim. Addenda and creative clauses should be reviewed by a real estate attorney to insure compliance with local law and protection for all parties.
In some cases, closing in escrow may occur. In this process, a title company or other trusted party holds the money and the signed deed, and arranges for the transfer. Escrow ensures an orderly transaction. In other cases, a process called settlement takes place on a specified date and time during which all parties meet at a settlement company, and which is presided over or supervised by a lawyer or settlement agent. At that time, the settlement agent disburses all funds listed on the settlement statement and the property conveyance takes place. The deed is then recorded by the settlement company.
- Importance of hiring a Real Estate Lawyer:
For most persons, the purchase and sale of their homes will be the largest financial transaction that will occur during their lifetimes. As a result, the importance of wholly protecting such an investment cannot be overstated. You should make a number of important decisions which have legal consequences. Whether you are buying or selling real estate, it is very important to have an attorney for your real estate closing. A real estate attorney ensures that everyone understands the complex legal process that real estate closings are, and that everything is above board. Closing should be completed under the supervision of an attorney.
- Title Examination
A clear property title is essential for the buyer and lender in a real estate closing. Once the purchase agreement has been received, we can begin examining the title. For the sake of the buyer, we will evaluate the restrictions, encroachments, easements, and whether the title clearly allows the seller to transfer it to the buyer. We will then identify if there are existing mortgages on the property that must be satisfied in order to transfer the title over. For the sake of the lender, we will create an overview of any judgments, mortgages, or liens in existence that must be settled before closing. Any concerns about the status of the title are addressed during this process.
- Title Insurance
Title insurance is important because if there is a problem with the title in the future, it protects the buyer and the lender. After the title examination, your real estate attorney writes an opinion about the title for the title company so they can issue a title binder, which is necessary for obtaining title insurance. Title insurance is absolutely essential for the lender because they must assure that it is in the first lien position of the property, but it is optional for the buyer. However, it is best to go through with title insurance, given that it is relatively inexpensive and protects the buyer’s rights to the property.
The real estate closing attorney coordinates all of the parties involved in the closing. The attorney communicates with the buyer, seller, and lender, brokers, surveyors, the homeowner’s insurance company, home inspectors, contractors, homeowners’ associations, among others. The closing attorney coordinates all of these parties in order to ensure that the closing occurs in a timely manner. Throughout the entire process, the closing attorney is necessary for communication but is especially crucial when preparing the settlement statement and when confirming the dates and amounts of money needed for the closing.
- Review Of Documents
On the day of closing, the real estate attorney must be present to go over the various documents. The closing attorney can offer explanations for any confusing documents, such as the deed, settlement statement, loan documentation, etc.
- Record And Disbursement Of Funds
Finally, the closing attorney closes the transaction and distributes all the funds. After reviewing, the real estate closing attorney makes a final review of the title and deed, then issues the final opinion on the title and pays the title company. The closing attorney then distributes all of the transaction funds, e.g., brokerage fees, county taxes, homeowner’s insurance premiums, inspection fees, seller’s proceeds, and the attorney fees.
- Selection of a right Attorney:
If you are paying the attorney fees, you alone should select the attorney to ensure that your interests are being represented and not that of the other parties in the transaction. An attorney’s role in real estate transactions is very important and may include a consultation prior to the signing of the Contract, preparation of closing documents, the title search and certification, presiding over the closing and recording of the deed and mortgage. All of this work is done in close coordination with the Buyer(s), Seller(s), Realtor(s), and Lender(s). The attorney strives to assure that this complex procedure is carried out in the most pleasing and expedient manner possible. Therefore, choosing an experienced real estate attorney to handle your purchase and the closing is especially important.
Residential and commercial real estate transactions are huge financial undertakings. While it is not required you hire an attorney, it is highly advisable. When handling a closing, your goals should be twofold: first, to protect your financial and property rights, and second, to make the process as time- and cost-efficient as possible. A right Attorney explains closing documents, understands your risks, knows your rights, performs due diligence, clears the Title, among others. Contact for ‘Free Consultation’ the experienced, dedicated, and committed Real Estate attorneys at Pheterson Spatorico LLP or visit us at https://psnlawgroup.com/contact-us