Whether buying a house or refinancing your existing mortgage, you as the purchaser/borrower may ask, ‘what is the role of the closing attorney’? There are five primary functions handled by the closing attorney during a real estate transaction:
- Title examination: The buyer and lender will both want a clear title for the property. Without clear title, the sale may become much more complicated. Upon receipt of a real estate purchase agreement or a request from a bank or mortgage broker, the closing attorney will begin to check the title to the property being sold. The title examination is for the purchaser and the lender to evaluate title to the real estate. The purchaser will need to know whether there are certain restrictions of use, easements, encroachments or whether the title is marketable and clear for the seller to transfer the property to the purchaser. The closing attorney will identify any existing mortgages against the real estate that will need to be satisfied at closing in order to transfer good title. The lender will want to have an overview of what liens, judgments and mortgages, if any, exist that must be addressed prior to or at closing so it can secure a 1 st lien position on the real estate. Also, the title examination provides the lender’s underwriters with opportunity to raise concern with the status of the title.
- Title insurance: Title insurance protects the buyer and the lender in the event a future problem is found with the title. Once the title examination is completed, the closing attorney prepares an opinion on the title that is offered to a title company for the issuance of a title binder, which is preliminary to obtaining title insurance. Title insurance is optional for the purchaser in a real estate closing if he or she does not have to get financing through the bank or mortgage broker; is a requirement for most all lenders at the time of purchase or refinance of real estate. From the purchaser’s prospective, title insurance is highly recommended to insure the purchaser on the title, with regard to claims of interests, rights and liens against the subject property being purchased. It is reasonably affordable and worth the expense. From the lenders perspective, it is a requirement because the lender seeks every assurance that it has secured its first lien position on the property, and the policy is there to stand behind that lien position. This may be handy for the lender as well if it does not intend to service the loan, and plans to sell its note to another company to service that was not in the picture at the time of closing on the loan.
- Coordinator: The closing attorney creates lines of communication between all parties involved in the real estate closing. The closing attorney not only talks with lenders, buyers and the seller, but may coordinate with real estate brokers, surveyors, merchants or parties that hold judgments that have attached to the real estate, the seller’s mortgage holder (payoff request), the purchaser’s prospective homeowner’s insurance company, the county tax department, adjoining property owners, home inspectors, contractors, homeowner associations and the seller’s attorney. The closing attorney has to remain mindful of all the issues that must be addressed for the closing transaction to go smoothly, but must also often times communicate with multiple parties to coordinate the timely close of the transaction. A great deal of the coordinating and communicating occurs throughout, but is most significant when the closing attorney starts preparing the settlement statement for closing and must account with multiple parties on dates and dollar amounts for closing.
- Review of documents: On the day of closing the closing attorney is present to review the various instruments associated with the real estate and loan closing. The closing attorney is available to explain documents such as a deed, a note, a deed of trust, a settlement statement, disbursement at the end of the transaction and loan documentation required by the lender.
- Record and disburse: The closing attorney is literally responsible for closing on the transaction and distributing all monies. After review and execution of the necessary instruments of a real estate or loan closing, the closing attorney checks the local registry one last time to update the title, and records the deed and/or deed of trust. The closing attorney then issues a final opinion to the title company and pays the title company its premium. The closing attorney disburses any and all other fees and amounts associated with the transaction, to include any real estate brokerage fees, county taxes that are due and payable, payoff monies for existing loans, homeowner insurance premiums for the purchaser/borrower, pest inspection fees, homeowner association dues, home inspector fees, the bank or mortgage broker’s fees, seller’s proceeds from sale and the attorney fees for closing.
While the closing attorney is typically located in or near the county where the property sits, many actual real estate closings today are handled on one or more sides using overnight mail with payments via ACH or wire. This option makes it much easier for a seller who has already moved a distance away and needs to close the sale without returning to the area. Closing by mail adds some minor additional steps (and some extra costs) in the role of the closing attorney to coordinate sending the paperwork overnight and setting up alternate payment methods.
From the overview above, the closing attorney’s role is vital to the real estate transaction. Selecting a closing attorney may prove particularly important, and it is advisable to seek a closing attorney that is organized, attentive to details and mindful of the importance of your transaction. Contact Brinkley Walser Stoner today if you need a closing attorney for a real estate transaction.
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Real Estate Closings – How to Seal the Deal Real Estate Closing Cost
Transferring property title and closing the transfer of ownership of the property must be done correctly with the proper forms to ensure the legality of the transaction and avoid future problems. Having the proper forms for closing title will determine ahead of time the closing costs which are paid by either party, and apportion which expenses, such as homeowner’s insurance and property tax at closing, are to be paid by the seller of the buyer. A real estate closing document can also define what happens at the closing if the seller backs out of selling. US Legal Forms has professionally drafted real estate closing statement examples and closing checklist forms to make transfer of ownership of the property simple. Let’s look at some of the timing involved and steps involved with the closing date in home purchasing.
Steps Before Property Closing Closing Cost Calculator For Seller
The seller should provide the following a couple of days before or at a home closing:
- a. Proof that property taxes at closing are paid
- b. Proof that municipal services are paid
- c. Proof that all utilities are paid
- d. Proof that HOA fees are paid
- e. Permission for the buyer to conduct a walk through of the property before closing.
Steps At Closing Closing Form
- a. The parties execute the property deed
- b. The parties exchange payments according to the purchase agreement
- c. The buyer receives keys and garage openers, if any
Steps After Closing Closing Checklist
- a. The property deed is recorded with the land recorder’s office
- b. The buyer receives a copy of the recorded deed
- c. The buyer informs the local tax authority of the transfer so that property tax billing can be updated
Some of the other papers you’ll see on the closing date include:
- Commitment letter by the mortgage lender
- HUD 1 settlement statement, also called a HUD 1 form or HUD statement
- Title insurance papers
US Legal Forms offers closing statement examples, along with a HUD settlement statement and other essential forms needed for closing property. Our professionally drafted title closing and closing checklist forms help you make sure that closing costs and title transfer go smoothly. The terms addressing closing costs that must be paid by the buyer and remedies if the seller decides to back out can be addressed. By having the closing costs and what happens at closing spelled out, it can reduce the chances the seller will back out of the deal. During the real estate closing process, the property closing costs are apportioned. It’s important to clearly define which closing costs are to be paid by the buyer and which are to be paid by the seller.
Some of the closing costs that need to be addressed include:
- 1. Appraisal Fee
- 2. Title Search
- 3. Survey
- 4. Taxes
- 5. Utilities
- 6. Recording Fees
- 7. Transfer Fees and Taxes
- 8. Inspection Fees
- 9. Homeowner Association Dues
- 10. Attorney Fees
- 11. Property Insurance
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Basic Principles Behind A Real Estate Title Closing
In Florida, the real estate sector is a large part of the local economy with a substantial number of residential and commercial real estate closings occurring on a continual basis.
Although Florida real estate attorneys fully understand the real estate closing process as they are involved in real estate closings every day, many of the other participants in Florida real estate agency transactions often experience some confusion as to everything that happens between the time the purchase and sale contract is signed to the date of closing.
This brief article is written to explain the closing process and the basic steps that are customarily followed in every Florida real estate transaction so that buyers, sellers, real estate agents, lenders and other interested parties will have a better understanding of the many actions taken by Florida real estate attorneys to successfully close a real estate transaction.
Submission of the Title Order
After a purchase and sale contract is signed between the buyer and seller and the initial escrow deposit is made by the buyer, the buyer’s lender (if the transaction is being financed) or the buyer’s real estate agent (if the transaction is a cash transaction) will submit a request for title to the closing attorney chosen by the buyer to start the process.
Typically, the buyer’s lender or real estate agent will complete and send a one or two page form to the closing attorney which contains all of the relevant information related to the transaction such a party names, property description, purchase price, lender information and exiting mortgages. Most real estate attorneys also have pages on their websites where the buyer’s lender or real estate agent can electronically complete and send in the request for title. The buyer’s realtor will also typically send a copy of the signed purchase and sale agreement to the closing attorney at this point.
Processing the File
The processing stage of the transaction commences immediately after the closing attorney receives the request for title. As there are many third parties who must be coordinated with in order to obtain all of the necessary information and documentation in time for the closing date, an experienced Florida real estate attorney will commence the processing stage as soon as possible after the receipt of the request for title.
The file processing stage includes ordering tax information that shows the status of current and prior years taxes, loan payoff statements, surveys, homeowner or condominium association estoppel letters showing maintenance fees and any assessments, inspection reports, and certificates evidencing hazard insurance.
In addition, at this stage the Florida real estate attorney orders the title search report from the title insurance underwriter and the lien and judgment search report from the lien search company.
During the title search phase of the transaction a thorough search is made of the public records in the county in Florida where the real property is located. Records searched and located include deeds, mortgages, lis pendens, judgments, easements, restrictive covenants, title liens, divorce settlements and any other documents recorded in the public records which affect title to the property.
After all of the documents are located, the title insurance underwriter prepares a title search report, which includes all such documents and sends it to the closing attorney.
After the closing attorney receives the title search report from the title insurance underwriter, the title examination phase commences. The closing attorney will first issue a title commitment to the buyer (and if applicable, the lender) based upon the information contained in the title search report.
Next the closing attorney will examine all of the documents found during the title search that affect the title to the property in order to determine the current status of title and whether any title clouds exist which need to be cleared prior to closing. The closing attorney also verifies the record legal owner of the property and makes note of any debts owed against the property.
After any and all title clouds have been cleared and the parties are ready to close the transaction, the Florida closing attorney will proceed to prepare all of the documents in order to close the transaction, which includes the deed, bill of sale, affidavits, FIRPTA certificate, and closing statement.
In connection with this, if the buyer is financing the purchase, the buyer’s lender will submit to the closing attorney its closing instructions so that the closing attorney can include all of the lender’s charges, fees and escrows on the settlement statement.
An experienced Florida closing attorney will distribute drafts of all of the closing documents to all interested parties in advance of closing so that same may be reviewed, commented on, revised, if necessary, and ultimately approved well in advance of closing.
Settlement/Closing the Transaction
Once all of the closing documents have been approved, a date and time to close the transaction is scheduled. At the closing the closing attorney oversees all aspects of the closing of the purchase and sale transaction and answers any questions the parties may have which relate to the transaction and/or the closing documents.
The seller signs the deed and the other seller documents, the buyer signs the buyer’s documents and the loan documents (if the transaction is being financed), and both parties sign the HUD-1 settlement statement.
After the closing has occurred the seller, real estate agents, the attorneys and other parties to the transaction are paid and certain documents are sent to be recorded in the county in which the property is located.
Are You Looking For Title Insurance or Closing Services?
Nationwide Title Agency has been providing title services throughout Florida since 2006. Our level of passion about title which is unmatched in the industry. Our highly skilled staff are always committed to ensuring the success of every transaction we do, in South Florida, nationally and internationally. In addition, our strong relationships with many of the nation’s top underwriters give us the flexibility and our clients every advantage. Call us today for a title inquiry at 954-755-8210 or click here for a title quote request.
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