Real estate closings bring all interested parties together. They involve the execution and delivery of all necessary documents simultaneously with the payment of the purchase price and the settlement costs of the transaction. While this may seem like a simple process, conducting a real estate closing is a complicated matter and requires a thorough knowledge of the law. Accordingly, sellers and purchasers often turn to attorneys.
Closing involves a series of complex phases: examination of the title, completion and explanation of legal documents, and resolution of any possible title difficulties. Real estate closing attorneys conduct each of these steps. First, they examine the title records for prior conveyances, unpaid mortgages, liens, judgments, easements, and other encumbrances and clouds on title. They verify that the seller has the authority to convey a good title to the property and that no errors exist in the deeds in the chain of title. They likewise negotiate with the title insurance company for insurance coverage to insure titles against any adverse claims of ownership, liens, and easements.
Closing attorneys next combine all relevant information into one set of closing documents. At the closing, they provide detailed explanations of the documents to insure that the parties understand all issues involved in the transaction. Such matters include: the relevant contracts of sale, obligations of contracts, ordering of the title searches, their analysis of title searches, significance of the title search, quality of title, extent of risks, probability of damage, obligation to close or not to close, process of closing itself, and documents there exchanged. They then disburse funds, record relevant documents as public records, and prepare title insurance policies for the purchaser and lender.
The closing attorney’s role can be summed up as follows:
For buyers, attorneys:
• Review and negotiate the specific terms of contracts;
• Evaluate all legal documents, such as the deed, title policy, mortgage, survey, closing statement, and seller disclosure statement;
• Attend the closing and make sure clear title is transferred;
• Scrutinize charges to make sure that they are consistent with estimates; and
• Provide updates of any facts that affect the property interest and provide counsel if difficulties arise.
For sellers, attorneys:
• Review and negotiate the specific terms of contracts;
• Request title searches, surveys, mortgage payoff letters, condominium documents and all other items necessary for closing;
• Prepare the deed, all other closing documents, and closing figures;
• Arrange for the closing at a convenient time and place;
• Attend the closing and ensure that clear title is conveyed;
• Review charges for consistency with estimates; and
• Provide updates of any facts that affect the property interest and provide counsel if difficulties arise.
Not all states require attorneys for closing a real estate transaction. Many states in the western United States allow title companies to fulfill this role, so in those parts of the countries attorneys are not involved in routine real estate transactions such as purchasing a residence or raw land.
Call me if you have any questions about this article.
Martin D. Eagan
52 Maple Avenue
Morristown, NJ 07960
973-898-7300 x126.
Marty@MartyEagan.com
www.MartyEagan.com
