Your Attorney's Role in Real Estate Transactions

The purchase or sale of real estate, whether it be a home or a business, is an important transaction which will have a permanent impact on your life, both personally and financially. The importance of sound advice at the outset of such a transaction cannot be overemphasized. The following is a synopsis of an attorney's role in such a transaction to better inform you of why such representation is necessary.


The Contract of Sale

Generally, a prospective buyer and seller should each consult an attorney prior to signing a contract for the sale or purchase of any type of real estate or business. Each party has competing interests both from a tax and personal point of view which must be analyzed prior to entering into any binding agreement. the contract is one of the most critical documents because it must properly set forth all the terms of agreement. It will be enforceable as a legal agreement in a court of law in the event of breach by either party.


Title Search

A title examination in the town land records where the property or business assets are located is designed to assure that you will be obtaining a title which is marketable, i.e. free and clear of all liens, attachments, mortgages or other encumbrances. This requires an examination of the land records for a period in excess of 40 years. If as a result of this title examination any defects in the title or other liens, attachments, or mortgages are found, the seller would have the responsibility, under the terms of the contract, of clearing these prior to the date of closing. An attorney must also examine other municipal records to see if the property has acquired all necessary permits relative to the use and occupancy of the property.


Bank Financing

Quite often a buyer's attorney is called upon to assist on a local level in negotiating terms of a loan on behalf of the client. The attorney may end up acting as a liaison between the buyer and the bank in seeing that all the necessary financial facts and data are submitted to the bank in a timely fashion so that a prompt commitment of financing may be rendered. Your attorney should have a good idea of prevailing lending rates and which bank may currently be offering the best terms on different types of property insofar as interest rates, "points" or other details of a real estate loan are concerned. Your attorney will often be required to provide a policy of title insurance to the bank on your behalf .

The Closing

Once the closing is scheduled with the broker and the attorneys for each party, the buyer's attorney sees to it that the buyer/borrower fully understands the loan documents being signed and that these correctly represent the terms of the financing commitment. The buyer's attorney is also responsible for assuring that all of the documents are properly executed in recordable form and that all necessary and proper allocations and adjustments are made relative to the costs of the property such as real estate taxes, fuel oil, dues or other assessments.

Following The Closing

After the closing, the deeds must be recorded in the local town clerk's office. Once recorded, the attorney must then update the title by examining the deeds to see that they are properly recorded and then make a final report on title to the bank. The deed of conveyance along with copies of all other pertinent documents are then sent to the client.

Fees

Before selecting an attorney you should not hesitate to discuss fees and the "costs" of closing so that there is a complete disclosure and understanding in this regard.


In general the role of the attorney in the purchase of a home or business will be greatly determined by what use you make of that individual and their expertise. Choosing an experienced real estate attorney to handle closing is an important first step to protecting this significant investment. It is also important to pick an attorney who works well with the broker, the bank and the other attorneys involved so that a smooth, pleasant and timely closing will result.