Real Estate Closings

Should I hire a real estate attorney if I have realtor and there is a title agent involved?  You are about to embark on one of the largest transactions of your life.  There is a great deal of money involved and potential risks that you may not understand how to maneuver through the process.  While a realtor and/or title agent can give you advice, unfortunately, they cannot give legal advice or advocate for your interest in the property.  It is recommended that you hire an attorney before signing any contracts as attorneys have the experience to navigate many of the issues that can arise during the transaction and can protect your interest.  Attorneys are able to advise you on issues ranging from title, zoning, financing, inspections, taxes, and other contract contingencies that the realtor and/or title agent cannot.

If I anticipate using financing to purchase a home, how early should I apply?  If you are considering purchasing a home, you may need to obtain financing.  If that is the case, you can go to you bank or you can go through a mortgage broker.  While not required, you can do this prior to finding a home.  This will allow you to obtain pre-approval for a loan.  Sellers may be more likely to negotiate with you if they know you are pre-approved for a certain loan amount.  It also gives you the ability to look for a home that is within the appropriate price range for your pre-approved loan amount.

I am purchasing a home and have entered into a contract, what are the next steps?  Congratulations, you have made the first step towards purchasing your new home.  Once you have secured a lender, if needed, there are a few things that you will need to complete.  Here are some of the items that will need to obtained in order to close on your new home:

• Title Agent. If you are purchasing a home in a county where it is customary for the Buyer to choose whom will act as title agent, you have several options.  If you have hired an attorney, check to see if the attorney’s office also performs title work.  If not, they will be able to refer you to a company that can handle this aspect of the closing.  However, in some Counties, the Seller is responsible for paying for title insurance.  In that case, the Seller would select the title agent.  Please review your contract to verify if this is your responsibility or the Seller’s.
• Home Inspection. You will want to have the home inspected by a licensed Home Inspector within the time allotted by the contract.  This inspection should reveal any defects with the home’s structure, electrical, plumbing and roofing.  There are two (2) additional inspections or reports that you will want to obtain as well: (1) pest inspection, and (2) wind mitigation report.  The wind mitigation report can potentially reduce the premium for your homeowner’s insurance.
• Appraisal. The lender will require an appraisal in order to determine the actual value of the property.  This ensures that the loan amount is sufficient to cover the cost of the home.
• Homeowner’s Insurance. You may be required to obtain homeowner’s insurance in an amount that will cover the home in the event that it is destroyed.  Insurance companies will typically insure the property for an amount that would cover the complete rebuild of the home from the ground up.  It is also recommended, and, in some areas of Florida, required that you obtain wind insurance.  This would be a separate policy, and your insurance agent will let you know if it is required or just recommended.
• Survey. If you are purchasing a single family home or, in some cases, a townhome, the lender will require that you obtain a new survey.  The survey should reveal any and all encroachments and easements, and will portray exactly where your property lines are located.  This information is beneficial should you decide to make any improvements to the external property.
• Apply to Homeowner’s Association (if applicable). If the property is located within a homeowner’s association, you may be required to make application with the association or the management company.  Please check with your realtor to obtain the rules and regulation of the association.

I am selling my home and have entered into a contract, what are the next steps?  So you have made the decision to sell your home, that is a big decision.  Here are some things you will need to do in order to have a seamless transaction:

• Title Agent.  If you live in a County where the Seller pays for title insurance, then you will need to choose a title agent to perform the title search and perform the closing.  If you have hired an attorney, check to see if the attorney’s office also performs title work.  If not, they will be able to refer you to a company that can handle this aspect of the closing.  Once you have chosen a title agent, you will need to provide them with the following information:

• Copy of Contract.
• Contact information for your homeowner’s association and/or management company for the association, if any.
• Contact information for the lender for any mortgage you may have on the property.
• Loan number for any mortgage you may have on the property.
• If you will not be available to attend the closing personally, please provide the address at which you would need to receive the closing documents.
• If you are requesting that closing proceeds be wired to your personal account, please provide the title agent with a copy of your bank’s wiring instructions. Do not provide a blank check, as the routing number may be different for incoming wires.

• Schedule Moving Dates. As the date of closing approaches, you will need to schedule the move with your family and friends, or a moving company.
• Utility Accounts. You will want to schedule switching the utility accounts approximately one (1) week prior to closing.  It is recommended that you leave all utilities on within the home through the date of closing.  This allows the Buyer time to ensure that everything is still in working order when the walk-through is performed the day before or on the day of closing.
• Mail. You will want to file the appropriate change of address with the U.S. Postal Service approximately one (1) week prior to closing.  Be sure to specify which date you will want your mail to be forwarded to the new address, preferably one (1) day prior to the closing date.  This will ensure a smooth transition of your mail service.

There is about one (1) week left until I to close on the property.  What happens now?  Each party, Buyer and Seller, will have certain responsibilities to perform during this time.  Here is what you can expect:

Buyer:  Approximately three (3) days prior to closing, you will receive either a Closing Disclosure (if financing the property) or a HUD-1 Closing Statement (cash only closing).  You will be asked to review this document carefully to ensure that all fees and costs are correct.  Below are some fees and costs that you may be obligated to pay:

• Real estate broker fees.
• Loan/lender fees and costs.
• Any Appraisal and/or survey invoices.
• Title agent closing fees.
• Attorneys’ fees.
• Lender’s title insurance policy (see below).

Once you have confirmed that all of the fees are correct, the title agent will advise you as to the amount of money due that you will need to close.  It is recommended that the funds be wired in order to avoid any delay in funds availability for disbursement.

Seller:  Approximately three (3) days prior to closing, you will receive a HUD-1 Closing Statement.  You will be asked to review this document carefully to ensure that all fees and costs are correct.  Below are some fees and costs that you may be obligated to pay:

• Real estate broker commissions and fees.
• Attorneys’ fees.
• Title agent closing fees.
• Title search fee.
• Owner’s title insurance policy (see below).
• Recording fees associated with the deed, along with any documents necessary to clear title.
• Courier fees.

Once you have confirmed that all of the fees are correct, the title agent will advise you as to the amount of money due to you.  You will be asked to confirm the wiring instructions and, if you are not attending closing, the best way to forward any documents for execution.

It is closing day, what now?  If not already completed, the final walk-through of the property will be performed the morning of the closing.  This will ensure there that have been no material changes to the property other than those previously agreed upon by all parties.   After the walk-through, all parties will meet at the title agent’s office to finalize the transaction.  Here is what will be needed:

Buyer:  Two (2) forms of identification (i.e. driver’s license and passport), and, if applicable, the original Certificate of Approval from the homeowner’s association.

Seller:  Two (2) forms of identification (i.e. driver’s license and passport), and all keys and/or garage door/gate openers for the property.

 If the Buyer used a lender for financing, the title agent will forward any required documents to the lender in order to obtain approval to release all funds.  Once approval is obtained, the funds will be disbursed by the title agent to all necessary parties and the transaction will be finalized.

What happens after the closing?  Approximately four (4) weeks after the closing, the title agent will issue any and all necessary title insurance policies.  Additionally, if there were any overpayments by any party, all refunds will be issued and forwarded to the appropriate party.