Real Estate “Closings”

Many people, when referring to home purchases and sales refer to them as “closings”, and when speaking to lawyers often ask them whether they “do closings”, as though such events were simple and quick, requiring little effort. Such an attitude reflects a deep misunderstanding of the long, involved, and complex process of buying or selling a home. The more accurate description of this process is “real estate transactions”. There is a tremendous amount of work and attention to detail required by both attorneys involved, their staffs, the brokers, title searchers, home inspectors, mortgage companies,  title insurance companies and others to produce the final result, which is the transfer of title to a home from one person to another. The closing is merely the end result and the tip of a very large iceberg.

Some of the work required on the part of the buyer’s attorney includes reviewing any binder that has been signed by the buyer, arranging or doing a title search of the property, dealing with any lender involved, reviewing the draft contract from the seller’s attorney and making any necessary revisions or additions, making or sending numerous phone calls, e-mails, letters, and faxes to various people involved in the transaction, reviewing the final draft of the contract for sale and supervising proper execution by the buyer, reviewing and checking adjustments proposed by the seller for taxes, fuel, and utilities, preparing all documents needed for closing, making sure the buyer has ‘good funds’ for closing, reviewing the draft of the proposed deed from the seller, doing a run-down of title prior to closing, attending closing and ensuring that all necessary documents and funds have been exchanged and dealing with any last-minute problems. After the closing the deed has to be recorded at the town clerk’s office and a summary of the closing has to be prepared for the buyer.

Some of the actions needed by the seller’s attorney include reviewing the binder signed by the buyer, setting up a schedule of events leading to closing, drafting a contract for the sale of the house and sending it to the buyer’s attorney, obtaining a copy of the current deed and any existing survey and ensuring that the property description in the deed is correct, obtaining property tax information and information from fuel and utility suppliers for closing adjustments, communicating with seller’s broker, buyer’s broker, buyer’s attorney, municipal officials, survey firms, and mortgage companies, obtaining a mortgage payoff letter and advising buyer’s attorney about funds needed for payoff, preparing certifications and affidavits for closing, preparing the deed and conveyance tax forms, negotiating any deed revisions or additions with the buyer’s attorney, preparing checks for brokers’ commissions, conveyance taxes, attorneys fees and other expenses, preparing an undertaking to the buyer’s attorney regarding mortgage payoff, attending and supervising the closing of title to the property, sending the mortgage payoff check and related documents to the mortgage company, and preparing a summary of the closing for the seller.

So, as you can now see, a “closing” is a much bigger deal than you thought it was. Hopefully this description will generate a little more respect for the process.