Profile of a Residential Real Estate Closing
Richard J. DeAngelis, Esq.
A residential real estate closing is quite often a time of great expectation and also a time of great anxiety. You can be assured that this office Law Office of Richard J. DeAngelis, LLC will exercise their knowledge and experience to make the process as smooth and stress-free as possible for their clients. Whether representing a seller, buyer or lender, they ensure that the transaction moves as expeditiously as possible from start to finish.
The purchase or sale of a home generally begins with the drafting and negotiation of the Offer to Purchase. The Offer to Purchase is often of critical significance to both the buyer and the seller. For the seller, the price, closing date, mortgage commitment date, inspection contingencies, and the date by which the Purchase and Sale Agreement is to be signed are of vital importance. For the buyer, in addition to these issues, the financing terms and the scope of the inspection contingencies are important. A thorough inspection enables the buyer to ensure that the condition of the property can be adequately assessed and any defects or deficiencies can be appropriately identified and addressed.
After the inspections are completed, both the buyer and seller must explore the options available to them. Depending upon the magnitude of any defects in the building, the buyer may elect to terminate the transaction, may seek a credit from the seller to enable the buyer to perform the repairs or may propose that the seller perform the repairs prior to the closing. In response, the seller may offer a credit to the buyer, may agree to perform some or all of the repairs identified by the buyer, or may indicate that it will not do anything. The negotiation of these issues is expedited by the advice of an attorney. Often a contractor must be consulted to obtain estimates of cost and of the time necessary to accomplish the repairs. Once the terms have been agreed upon, either party can prepare the Purchase and Sale Agreement. The Purchase and Sale Agreement must contain all of the terms and conditions of the sale. An experienced attorney will carefully review each provision of the Purchase and Sale Agreement even if submitted as a standard form agreement. No two real estate transactions are identical and, therefore, to protect the client’s interests, the provisions must be tailored to accomplish the client’s particular goals in the transaction. An experienced attorney will know the appropriate language to be added to or deleted from the Purchase and Sale Agreement to accomplish those ends. The attorney will also know negotiating strategies which will implement the client’s objectives to the greatest extent possible while protecting the transaction. The attorney will be familiar with current trends and have readily available the most current laws and regulations which govern real estate transactions and land use. State of the art technology also plays a significant role in expediting the preparation and execution of the Purchase and Sale Agreement. The internet enables the attorney to obtain current title and municipal records which affect the property, while electronic mail and facsimile provide instantaneous transmittal of documents.
Once the terms of the Purchase and Sale Agreement are agreed upon, it can be signed and the remainder of the deposit paid. The deposit should be held in escrow and it is accounted for at the time of performance of the agreement. Usually, the buyer obtains a mortgage commitment on or before a date specified in the Purchase and Sale Agreement. The terms of the mortgage commitment should be carefully reviewed by the attorney to ensure they satisfy the provisions of the Purchase and Sale Agreement. Once the mortgage commitment is obtained, the date, place and time for the closing are agreed upon by the parties.
At the closing, the seller and the buyer should be represented by an attorney. Careful consideration must be given to the many documents which must be signed. The parties must be assured that all of the obligations described in the Purchase and Sale Agreement have been fulfilled. In addition, items such as water and sewer charges, real estate taxes and rents must be adjusted between the buyer and the seller. The lender’s counsel usually acts as the settlement agent and prepares the settlement statement which itemizes the closing costs, the expenses of the seller and buyer and the adjustments between them. The seller delivers a deed to the premises to the buyer. The deed must be recorded by the lender’s counsel at the Registry of Deeds for the county and district where the property is located. The deed is usually recorded with the new mortgage to the lender. At the closing, the seller delivers the keys to the property to the buyer and the parties confirm the arrangements for occupancy by the buyer set forth in the Purchase and Sale Agreement. The proceeds of sale due to the seller will be made available to the seller’s attorney at the closing. The proceeds must be held by the attorney until the deed to the property has been recorded.
The entire process, from the Offer until the closing, is usually completed in approximately forty-five (45) days. This time period enables the buyer to obtain the mortgage commitment, permits the title to the property to be researched and a certificate to be obtained assuring that there are no municipal liens against the property, and allows lender’s counsel to engage an engineer to prepare a plot plan or tape survey which locates the house, driveway and other structures on the property as well as any buildings which might encroach onto the property, and which also certifies that the property complies with the dimensional requirements of the local zoning bylaw.
The purchase of a home, condominium, investment or commercial property, or vacant land is usually the single most important investment that a person makes. By retaining competent legal counsel early in the process, the buyer and seller can minimize the chance for any error and ensure a smooth and orderly transfer.