In Massachusetts, attorneys play a large role in real estate transactions. I’m proud to have helped many home buyers and sellers in Berkshire County MA cut through the frustration and confusion to complete their transactions. Under Massachusetts’s state law it is now a requirement to have an attorney preside in real estate closings. However even without such requirements it is advisable for the protection of all parties to have an attorney manage the closing process.
So what precisely does an attorney do besides carrying out the closing? Rather a lot now that you ask.
The attorney managing the closing takes on a number of time intensive activities. It’s worth knowing when you are finalizing your mortgage that you may request a closing attorney of your choice. The law was changed in 2010 to incentivize lenders to permit borrowers to choose from a number of attorneys or a personal lawyer they are familiar with. Exercising this options will potentially save you hundreds in legal fees as you can use the same lawyer to negotiate and review the purchase and sale agreement.
The process begins with intake and dealing with all inspection issues. The attorney then performs a title examination. Once a title order has been issued by the mortgage lender the closing attorney will request a municipal lien certificate to ensure everything is in order with the properties taxes. The attorney will also seek insurance binders and documents on payoffs of prior mortgages.
The attorney is legally responsible to perform a proper examination of the property title. The title should be investigated at least 50 years into the past. If problems are discovered, the attorney will work with all concerned in order to find a solution. Defects with a title can lead to very unfortunate wrangling so the importance of this step to peace of mind cannot be underestimated. Under Massacusetts law the attorney conducting the closing must provide a certification of title to the buyers.
Title insurance is also a step a good closing attorney can help organize for the buyer and lender. Title insurance policies are a necessity with financing. Title insurance protects the owner’s and lender’s interest in the property, much like homeowner’s insurance. I act as agent for Old Republic Title Insurance in issuing title policies to banks and buyers.
When the time for closing comes around the attorney will help parties gather, prepare and deliver the multitude of documents needed to cross every t and dot every i. This can range from something as important as the HUD-1 Settlement Statement to minutia like smoke and carbon monoxide detector certificates.
Issues that the closing attorney is responsible for can include:
– The payoff and discharge of mortgages
– Transfer taxes and fees
– Funding of mortgage escrow account
-Pre-paid interest payments
– proper disclosure and payment of closing costs and lender fees
– The allocation of taxes on real estate and utilities
– Distribution of proceeds from the sale
– Title V Septic certification and condominium 6(d)certification
– The payment of commissions to realtor
A good attorney will ensure that all parties understand the great many documents involved. They will see that all funds are properly distributed and finalize the closing.
It’s a process I’ve helped conduct for many satisfied clients in Mt. Washington, Sheffield, Great Barrington, Alford, Egremont, Monterey, Becket, Otis, Lenox, Pittsfield and New Marlborough.