About Real Estate Closings

General Information Relating To
Real Estate Closings

By Daniel Karpman Attorney At Law

The following information may be helpful in preparing for your real estate Closing, and in ensuring that the Closing goes as smoothly as possible.

Lender's Conditions

Please be sure to carefully read your mortgage commitment as to all of the lender's requirements. It is most important that all conditions specified by the lender be satisfied on a timely basis, prior to closing. The lender will set the closing date and time only when all conditions have been met.

If you have any questions regarding the lender's conditions, please contact the lender directly. The Attorney's office has no authority to waive or modify the lender's conditions.

Funds Required At Closing

The balance of the down-payment on your purchase, plus all closing costs, should be paid with a bank check or certified check. Unfortunately, personal checks and checks drawn on money market funds are not acceptable, unless the check is certified.

Your check should be made payable to the Attorney handling your closing, and should be brought to the closing.

The closing Attorney will provide you with the exact amount of your closing costs immediately prior to the closing date.

Homeowner's Insurance

Please make arrangements with your insurance agent to obtain the homeowner's insurance policy or binder prior to the closing. The lender also will require a paid receipt for one year. The lender will require this documentation in order to close.

The policy or binder must name the lender in the mortgage clause as loss payee, and include the phrase "its successors and assigns as their interest may appear." The lender's address also should appear on the policy or binder.

The property must be insured for at least the loan amount or the full replacement value of the property.

If the property is a condominium, the Master Policy and a unit certificate of insurance will satisfy the lender's requirements. The certificate should name you as the owner of the condominium unit. The certificate must name the lender as loss payee and include the phrase "its successors and assigns as their interest may appear."

Title Insurance

As a condition of making the loan, the lender requires that you purchase a title insurance policy providing coverage for the lender in an amount equal to the amount of the loan. The premium is a one-time payment, which is paid at closing.

The closing Attorneyís office arranges for the lender's title insurance policy. The lender's policy protects the lender's interest in the property as security for the outstanding balance under the buyer's mortgage. Please note that the lender's policy specifically protects the lender.

You may wish to purchase an owner's title insurance policy. An owner's policy protects your investment or equity in the property up to the face amount of the policy. The premium is a one-time payment which is paid at closing.

This office receives no financial remuneration or incentive for the purchase of an owner's title insurance policy. This is optional coverage, but its value lies in protecting your home ownership.

Timing

Upon completion of the loan application process, the lender will instruct your Attorney to order the title examination and plot plan (i.e., a modified survey), and to obtain the municipal lien certificate ("MLC") from the city or town where the property is located. The lender will not allow the loan to close without these documents. Generally, this office requires three to four weeks to secure these certificates. Please review the Purchase and Sale Agreement to be sure that the deadline for closing is consistent with these time constraints. If not, kindly notify your Attorney and your real estate broker immediately, and make arrangements for an extension, if necessary.

Please note that you will be responsible for these fees, even if you decide not to proceed to closing.

Title Examination

The "title" to the property is the owner's right to possess and use the property. In order to transfer a clear title to a parcel of land, it is first necessary to determine whether any rights have been acquired by others and are outstanding.

The title search is a detailed examination of the historical records concerning the property. These records include deeds, court records, property and name indices, and other documents. The purpose of the search is to verify the seller's right to transfer ownership, and to discover any claims, defects and other rights or burdens on the property.

The information presented in this article is general in nature, and is for informational purposes only. Please consult with an attorney for legal advice with respect to any specific matter.