If you’re in the process of shopping for a home on Cape Cod, you’re probably working very closely with your Realtor and have already engaged at least one mortgage lender. Once you FIND a home and are ready to make an offer, your team of professionals will expand immediately to include a reputable, local real estate attorney to help guide you through the intricate process of closing on your loan and home.
Many buyers of Cape Cod homes do not live in Massachusetts and are therefore unfamiliar with our closing process. In many states, lawyers are not even involved in the closing process whereas in Massachusetts, a lawyer is actually REQUIRED to preside over any real estate closing that involves a mortgage. This attorney is sometimes called the “Closing Attorney” and he or she represents the lender and usually the buyer as well, due to the common interests of the lender and buyer. So what exactly does the Closing Attorney do? Here’s a brief summary of his/her typical functions:
- Orders a municipal lien certificate to verify the status of all real estate taxes and other municipal charges applied to the property.
- Orders the payoff of any and all mortgages applied to the property.
- Examines the title to the property going back 50 years for all new purchases, and works with all involved parties to resolve any title defects.
- Provides the buyer with certification of title.
- Arranges for the issuance of title insurance for both the lender and the buyer. (Most lawyers strongly recommend that buyers obtain their own title insurance policies to prevent title problems down the road.)
- Works closely with the lender to prepare the buyer for the closing day by ensuring that the mortgage, promissory note, and closing disclosure (which replaced the HUD-1 in transactions involving a mortgage) are ready and accurate.
- Works closely with the seller’s attorney and the Realtors to obtain the deed to the property, the final utility bills, the smoke detector/CO2 certificate, Title V septic certification, 6(d) condominium certificate (if appropriate), and other closing-related documents and information.
- Oversees a number of issues at the actual closing, including payoff of mortgages, real estate taxes, utilities, and Realtor commissions, proper funding of escrow accounts, proper distribution of sale proceeds, and more.
Earlier in the process, the buyer also needs an attorney to review his or her purchase and sale agreement, which is generally initiated by the seller’s attorney. If there will be a mortgage on the home, it is usually recommended that the buyer speak to the lender about using his/her own attorney to represent both the lender and the buyer. This saves the buyer from paying for TWO sets of legal fees, since the lender will of course charge the buyer for its legal fees associated with the loan. The buyer’s chosen attorney typically must be on the lender’s list of approved closing attorneys.
If you’re looking to purchase a home on the Cape (or anywhere else in Massachusetts!), be sure to get a local attorney involved early. Your Realtor or local lender can set you up with a trusted, reputable real estate attorney to ensure that your interests are fully protected from the initial offer to the final signature at the closing table.