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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 lawyers.
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;
- Help assess financing options and explain the terms of loans;
- 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 lawyers are not involved in routine real
estate transactions such as purchasing a residence or raw land.
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