Real estate attorneys provide invaluable assistance, from drafting contracts of sale to handling inspection requests and ensuring financing approval. Furthermore, an excellent real estate lawyer also conducts title searches and issues policies.
Attorneys typically prepare closings by providing a final Closing Statement and attend closing to make sure all funds and checks have been properly transferred.
Contract of Sale
Home buyers signing contracts of sale commit themselves to buying the property and paying the purchase price, though many contracts allow for cancellation with their earnest money if important information arises during a home inspection or when searching title companies for outstanding liens or problems with the seller’s title.
Contracts should outline all parties involved and the terms for closing, including an escrow period, deposit amount (similar to earnest money deposits), any conditions that must be fulfilled for sale such as mortgage financing or survey/home inspection requirements. Your attorney should prepare the document as well as coordinating financial documents and records required by mortgage lenders as well as ordering a title report that could identify issues before closing day.
Mortgage
Home buying can be one of the biggest purchases you will ever make. Unfortunately, most people can’t afford to make full payments right away so they opt for a mortgage loan which are generally regulated by state law.
Mortgage loans involve using your property as collateral against a loan from the lender. This gives them legal ownership of it should you fail to meet financial obligations, giving them recourse through foreclosure as the means for taking possession.
Before applying for a mortgage loan, it must first be approved by your lender who will review your financial status and run a credit check. Furthermore, title companies provide assurances that your title to the property purchased is clear of liens while performing searches in state and county records to confirm whether the seller legally owns it.
Title Insurance
Most lenders require that mortgage loan applicants purchase a lender’s title insurance policy as protection for any legal claims on the property that cannot be resolved prior to closing. Attorneys also recommend buyers buy an owner’s policy that remains active as long as the homeowner owns their home.
Title companies conduct searches of public records to make sure the property sold has no legal impediments to sale, such as liens or any other issues. Sometimes such issues surface prior to closing; other times they may arise post-closing.
Title companies will issue both lender’s and owner’s policies for your property, with your attorney helping to make an informed selection based on recommendations, years of experience, online reviews and rates. An owner’s policy provides one-time protection from unexpected claims like liens, fraud or undeclared owners that arise on your property.
Closing
Your attorney will draft and negotiate the terms of your contract of sale, helping you understand all necessary closing documents as well as any relevant information such as how your lender calculates interest, insurance requirements, real estate tax payments or any other important considerations.
At closing, legally-binding documents will be signed and money exchanged between you and the home seller and their attorney as well as your own. Also present will likely be representatives from title company, mortgage lender and bank that provided your loan.
Have an experienced lawyer present can help prevent issues at closing that could compromise the purchase of your new home. For instance, if your contract contains contingencies for home inspection or financing that do not come to fruition, and these conditions aren’t met, your earnest money deposit could be forfeit. Having your attorney available during closing will enable them to explain these terms as well as provide relevant advice before signing any documents for signing purposes.
