CLOSING RESIDENTIAL REAL ESTATE TRANSACTIONS
What is a Closing?
Representing the Purchaser
Representing the Seller
Representing the Lender
Dual Representation of Purchaser and Mortgage Lender
Buying or Selling without a Real Estate Agent
WHAT IS A CLOSING?
A closing is simply the meeting of the parties to a real estate transaction at which all documents and funds are delivered and title is conveyed. For homebuyers and sellers, the closing is when the buyer assumes ownership and usually obtains financing from a mortgage lender, and the seller is paid.
Zlokower & Miller’s attorneys have represented home buyers, sellers and mortgage lenders in successful closings throughout the State of Connecticut for almost 30 years.
REPRESENTING THE PURCHASER OF RESIDENTIAL REAL ESTATE
The purchaser of residential real estate relies on an attorney to provide 3 essential functions:
1. Administration: The purchaser’s attorney “drives the bus” so that the real estate closing may occur in a smooth and timely manner. Prior to the closing, your attorney will coordinate with the attorneys for the seller and mortgage lender (or may represent the mortgage lender also - see the section on Dual Representation below) in order that all parties can be prepared for the closing. At the closing, your attorney will assure that necessary documents are signed and delivered and funds are correctly disbursed.
2. Title review and policy preparation: The purchaser’s attorney will arrange for a title search, examine title documents, resolve any title issues with the seller’s attorney and record the deed and mortgage and other important documents in the proper land records. Your attorney will also prepare title insurance policies for the mortgage lender and you to protect both parties against any defects in title.
3. Advocacy: The purchaser’s attorney represents the legal interests of the purchaser in pre-closing negotiations with the seller and at the closing table. Your attorney will review your purchase agreement and monitor all contingency dates. At the closing, your attorney will explain the terms and effect of each document, answer your questions and help you to resolve any issue which may arise.
Zlokower & Miller understands the stress and excitement involved in purchasing a new home and works hard to keep its clients informed and to make the closing process as smooth as possible.
REPRESENTING THE SELLER OF RESIDENTIAL REAL ESTATE
The seller’s attorney reviews the purchase agreement and negotiates any pre-closing matters on behalf of the seller. The seller's attorney will prepare the deed and other documents required to be delivered by the seller and assist the seller in resolving any title issues which may arise. For example, if there are mortgages or other liens on the property, the seller’s attorney will order payoff statements, arrange for payment to be made and releases to be recorded after the closing. The seller’s attorney will attend the closing on the seller's behalf and insure proper payment and a full accounting of all funds received at the closing.
Zlokower & Miller takes care of the legal details of a sale so that the seller will be prepared to close as swiftly as possible and move on to other matters.
REPRESENTING THE MORTGAGE LENDER IN RESIDENTIAL REAL ESTATE TRANSACTIONS
The mortgage lender’s attorney closes the mortgage financing according to the lender’s direction. The lender’s attorney confirms that all requirements to the loan have been satisfied prior to closing and that the funds are available. At the closing, the lender’s attorney generally acts as settlement agent, disburses all funds and assures that all signed mortgage documents are properly delivered to the lender in a timely fashion.
Zlokower & Miller is approved to represent most residential lenders in the Connecticut market and consistently has received high marks for service.
DUAL REPRESENTATION OF PURCHASER (BORROWER) AND MORTGAGE LENDER
Under the ethics rules for attorneys, the purchaser's attorney or the mortgage lender's attorney can represent both the purchaser and the lender if the attorney reasonably believes that (i) neither the purchaser nor the lender will be adversely affected and (ii) both parties have consented to dual representation.
In virtually all residential closings, the interests of the lender and the purchaser are so similar that there is usually no material limitation to dual representation. Generally, the lender provides all of the loan documents and detailed instructions which the attorney must follow. The attorney's major responsibilities to the lender are to assure compliance with its loan requirements and to act as settlement agent by accounting for and disbursing all funds. The purchaser's attorney is responsible for providing the title insurance to both the purchaser and the lender and to fully inform the purchaser of his/her legal obligations as borrower under the mortgage loan documents.
If, however, there arises some conflict between the purchaser and lender, the attorney can try to help resolve it, but cannot take either side. Nor can the attorney keep information disclosed by either party confidential from the other party if the attorney believes it will adversely affect either of them. (Such information may be kept confidential from third parties, however, subject to the law.) If the attorney believes that for some reason the attorney can no longer ethically represent either purchaser or lender, she/he would need to withdraw from representing both.
In almost all cases, Zlokower & Miller, LLP has provided dual representation to both purchasers and mortgage lenders without any of the above issues arising. We keep both parties informed during the preclosing process and go over all of the loan documentation carefully with purchaser at the closing and answer all questions.
Dual representation does provide savings by avoiding duplication of services and permitting efficiencies. The cost for separate representation may add several hundred dollars to the overall cost of a closing. However, all borrowers and lenders have a right to obtain separate representation if they so choose.
BUYING OR SELLING WITHOUT A REAL ESTATE AGENT
Because of their specific skills and market access, real estate agents provide a valuable professional service to buyers and sellers of residential real estate. However, occasionally one or both parties to a sale is not represented by an agent. In such a case, the attorney for the party, whether purchaser or seller, may take on a greater role by drafting the real estate agreement, counseling the client, negotiating preclosing issues or providing other services during the closing process.
Zlokower & Miller is prepared to provide legal services to any party who chooses to pursue a purchase or sale with or without a real estate agent.