The closing attorney represents the buyer in the buyer’s purchase of real estate, or refinance of a mortgage loan. The closing process can be divided into three parts: Pre-closing, Closing, and Post-Closing. Here are some of the responsibilities and tasks of the closing attorney.
Before Closing, the closing attorney’s office performs a title search of the property, and collects and gathers information and documentation, as well as funds from the lender and the buyer, assembling it all in anticipation of Closing.
The Contract. Once the buyers and sellers are under contract, the closing attorney uses the contract to set up closing and begin gathering information regarding the parties, the property, price and other terms.
The title search. This is one of the most important aspects of the closing process. Briefly, the closing attorney searches the records at the County Register of Deeds Office to determine ownership of the property, find restrictive covenants, check for access to the property, identify any easements or rights that benefit or burden the property. The title is reviewed for 30 or more years, to be sure a “chain of title” is in place leading to the current owner (this time period may be shortened if a “prior” title insurance policy can be found). The closing attorney also checks the records at the County Clerk of Court’s Office to be sure there are no judgments of record that create liens on the property. If the property is being sold out of an estate, the Clerk’s estate records are also checked to determine who has to sign the deed, and to be sure the estate has been properly processed. The closing attorney reviews County Tax office records. The closing attorney also checks with the municipality in which the property is located to be sure there are no outstanding assessments owed by the seller.
The Preliminary Title Opinion. Once the title search is done, the attorney draws up a “preliminary title opinion” and submits it to a title insurance company and orders a title insurance binder for the lender and the buyer.
Information Gathering. One of the main tasks for the closing attorney’s office is gathering information from a variety of sources, and assembling it for closing, including things such as:
- Homeowners insurance policies and premiums
- Homeowners Association Dues (which are collected and/or prorated at closing)
- Termite reports, home inspections, other costs to be collected at closing
- Home warranty information
- Realtor commission information
Preliminary information to lenders. Most of the information gathered is delivered to the buyer’s lender, in the form of a preliminary Closing Disclosure Form (“CD Form”), along with other documentation as needed.
Closing Package. Prior to closing, the lender delivers a loan package to the closing attorney. The closing attorney reviews the loan package, typing in the legal description, property tax information, homeowner’s insurance information, and various terms and details as needed to ensure the documents are fully complete and accurate. The closing attorney adds other documentation to the closing package that will be reviewed at closing, such as a copy of homeowners insurance, the title insurance binder, a copy of any plat map, any restrictive covenants, any home warranty. A copy of the entire package is made for the buyers.
Final CD Form and other documentation. The CD Form is where all funds involved are set out, and the loan terms are summarized. This final CD Form is occasionally different (hopefully only slightly) from the preliminary CD Form.
Funds to Closing. The buyers are informed of the amount of money to bring to closing (which must be either “certified funds” such as a cashiers check, or wired funds).
All the preliminary activity leads up to The Closing, which usually takes place at the closing attorney’s office. The closing attorney and the buyers attend, of course, and usually their realtor and occasionally the lender. The closing attorney reviews all the documentation involved in the transaction with the buyers. Including the CD Form, the other loan documents, and any other documents associated with the purchase such as a termite report, any home warranty, the plat map (and the survey of the property if one was requested) and, of course, the deed.
After closing, the closing attorney’s office updates the title, records the deed and the deed of trust at the Register of Deeds office, returns documentation to the buyer’s lender, and disburses funds to the seller, the seller’s lenders, the realtors, the new homeowner’s insurance company, and all the other parties whose funds were collected at closing.
Title Update. Once the loan funds and the “clear to close” have been received by the closing attorney, the closing attorney does a final “title update” which is, in essence, another title search. All of the records involved with a title search – at the Registry and at the Clerk of Court’s office – are checked from the date of the initial title search to the moment of recording the deed and deed of trust. This is done to be sure the title to the property is still “clear” and nothing has happened since the original title search was completed that would impact the new buyer’s title to the property.
Recording. Once the title update is complete, the closing attorney can record the deed (conveying title from the seller to the buyers) followed by the deed of trust (creating the “mortgage lien” for the lender). Recording may be done either by physically traveling to the Register of Deeds office, or by “e-recording.”
Disbursing. Once recording has occurred, the closing attorney informs the realtors and the buyer and seller. All of the funds collected on the CD Form are disbursed – the closing attorney conveys the proceeds to the seller, the commission to the realtors, the lender fees to the lender, and any other funds collected at closing for things such as termite reports, homeowners insurance, property taxes, home inspections, etc etc. The closing attorney must also be sure the seller’s loan payoff is sent out promptly, to avoid additional interest accruing.
Final Title Opinion. Soon after recording the closing attorney draws up a “final title opinion” which reports the deed and deed of trust recording information, and the status of the seller’s mortgage loans that have been paid off, to the buyer’s title insurance company, and the closing attorney sends that title opinion to the title insurance company along with the title insurance premium .
Final documents. Once the original deed and original deed of trust are returned to the closing attorney from the Register of Deeds office, the closing attorney mails the deed to the buyers, and the deed of trust to the buyer’s lender.