Tools & Tips

• fewest possible complications.  You also want to avoid potential liabilities If you are selling your home, you want the highest possible price and the after the sale.  An attorney can help you meet your goals by providing the following services:
• Informing you of your legal rights and obligations
• Reviewing the contract to make sure all provisions and contingencies are in your best interest
• Evaluating the status of the title to your home and pursuing appropriate legal remedies to clear any title defects
• Advising you on what your title insurance policy does and does not protect against, emphasizing marketability of the title when you sell
• Reviewing the closing statement and other closing documents, and letting you know about buyer contingencies, such as financing, that affect your interests
• Interpreting and counseling you about all legal documents related to the title and transaction, including deeds, mortgages and closing statements
• Preparing a bill of sale to cover any personal property that will remain in the home
• Informing you about tax consequences of your home’s sale.

An attorney has both a legal and an ethical obligation to work in your best interest.   You can best protect your interests by involving an attorney in the process as early as possible, from contract negotiations through closing.

Securing Your Home Ownership 
 
Title insurance secures your legal claim to the property you purchase and protects you against title “defects” — legal rights to a property claimed by someone else. Defects can surface even after you’ve closed on the property. Furthermore, numerous circumstances can arise that keep you from having a “marketable” title and, thus, can hamper your ability to sell the property in the future,  With title insurance, the title insurer not only pays the costs if you’re ever forced to defend your ownership in court, but also covers loss if the title defects can’t be settled.

Buying a lender’s title insurance policy is required for obtaining a mortgage. This protects the lender against any title problems. To protect your interests, you’ll also need owner’s title insurance.

Two Choices for Title Insurance 

You can get title insurance through two sources: a title agency or a real estate attorney.  A title agency not affiliated with a law firm is limited in the services it can provide, however.  For example, the title agency can’t prepare contracts, resolve many title or inspection issues or give you legal advice on the documents you sign during closing.  A real estate attorney can provide those services, in addition to preparing documents for closing and issuing your title insurance policy.  And the attorney’s fees are usually about the same as those of the title agency. 

Title Search  

The process of obtaining title insurance starts with a title search.  The goal of a title search is to assure you and the lender that the seller is the legal owner of the property and that there are no outstanding claims or liens against the property you are buying.  Title searches can be time-intensive, with numerous records to be examined, including liens, records of deaths, divorces, court judgments, and contests over wills – all of which can affect ownership rights.

Even a thorough title examination might not reveal hidden defects, however. That could leave your ownership rights in question even after closing, and that’s why having title insurance is so important.  

Examples of Hidden Defects:  

• Forged deeds
• Married seller who misrepresents himself or herself as single
• Claims of undisclosed heirs
• Clerical errors
• Incorrect legal descriptions
• Improperly probated wills
• Confusion resulting from similar names

Again, the purpose of title insurance is to protect against these types of defects. The title examination by a trained professional provides the first level of protection.  The title insurance policy provides protection for defects the title search might have missed. 

Title “Exemptions”  

Exceptions are situations where the title owner has relinquished control over an aspect of the property.  Many exceptions are beneficial, such as a utility easement; however, some exceptions can be problematic.  If you engage a real estate attorney early, he or she will assist you in objecting to any problematic exceptions and the seller will have to respond.  If the issues can’t be resolved in a timely manner, only a real estate lawyer may provide legal advice regarding your options.

Supplementing a Standard Title Policy  
 
Sometimes extended coverage is needed to supplement a standard title policy. This extended coverage, also known as a special endorsement, is used most often to protect owners of condominiums and planned unit developments (PUDs).  An attorney can advise you if special endorsements are needed.

In real estate transactions, the closing is the event at which you and the seller sign all of the documents to complete the transaction.  The usually occurs in an office.  While you and the seller will do all of the signing, others will be in the room to assist, including a closing agent.  The closing agent might be your real estate attorney or the seller’s real estate attorney.  Others present might include your real estate attorney, the seller’s real estate attorney, a mortgage loan officer, your real estate agent and the seller’s real estate agent. 

The Closing Agent 

The closing agent is the chief administrator of the closing process.  He or she will:

• Calculate what payments are to be made, and by whom, based on the purchase contract;
• Prepare documents for the closing; conducts the closing;
• Make sure taxes, title searches, real estate commissions and other closing costs are paid;
• Ensure that the deed and any mortgages are recorded, and
• Ensure that the seller is paid.

Many, Many Details  
 
The goal of the closing is to transfer title or ownership of a property.  A lot of paperwork needs to be processed to accomplish that – more than you could possibly read during the event.  That’s why it is important to have a real estate attorney at your side.  He or she will be well acquainted with all of the documents, be able to explain them to you and make sure that your interests are protected.
 
Part of the closing process will be financial housekeeping pertaining to ongoing homeownership expenses such as property taxes and utility assessments.  Some of these expenses will have been paid in advance by the seller and you’ll be required to reimburse the seller for your prorated share of those expenses.
 
Your real estate attorney can determine the value of these expense adjustments in advance so you will have no surprises on closing day.   

Closings in Separate Locations  
 
The buyer and seller can’t always be in the same location at the time of closing.  In such cases, the closing can be completed separately, with documents moving back and forth by fax and courier and funds being transferred electronically.  You might simply go to your real estate attorney’s office to sign the paperwork. When the closing agent receives all of the documents signed by both parties and verifies they are correct, he or she proclaims the closing official.
 
Documents to be Signed  
 
Closings involve the signing of many, many documents.  Here are some of them:

• Mortgage note. A written promise that you will repay your loan.
• Mortgage. The document that places a lien on property for the lender as security for the money borrowed.
• Closing or HUD-1 statement. This is a full list of all the costs involved in the closing, including your earnest money, expense adjustments to the closing costs, real estate agent’s commission and the exact amount of the loan and the amount due to the seller.
• Buyer’s funding check. The check from your lender may be payable to you or jointly to you and the closing agent; you’ll have to endorse it over to the closing agent.

Worry-Free Closings  

That’s a lot to think about and keep track of, isn’t it?  Don’t worry.  If you engage a real estate early in the home-buying process, he or she will be there to make sure closing day goes smoothly and without unpleasant surprises.

Unpleasant surprises?  How about having to pay unnecessary taxes because contract terms weren’t in your favor or discovering at the last minute that the purchase contract terms aren’t enforceable?  Things like that have happened at other people’s closings. Make sure they don’t happen at yours.  Engage a real estate attorney.