What is a Residential Real Estate Closing?

A real estate closing – also known as a "settlement" – is the point in time at which the title to the property is transferred from the seller to the buyer. If the buyer is financing the purchase, this is also the time the mortgage will be given to the lender. A closing agent acts as a clearing house for the parties' funds and information necessary to close the transaction.

When Should I Contact a Sarasota Real Estate Attorney?

Once the buyer is ready to make an offer to the seller and the realtor has prepared a form contract to make the purchase offer, it is at that time that you should contact a real estate attorney. Whether you are the buyer or the seller, it is very important that you communicate with your real estate lawyer before signing the contract as he or she can add provisions to protect you in the transaction.

The Closing Process

Once the contract has been reviewed and/or revised by your real estate attorney and terms have been agreed upon, the seller and buyer enter into a written purchase contract. At that time, a closing agent (who is often a real estate attorney) is selected to handle the closing process. The buyer then provides an "earnest money deposit" which is given to the closing agent to be promptly deposited into an escrow account where the funds are held until closing. Next, a request for preliminary title work will be submitted. This search is done to compile a list of requirements to be satisfied before ownership of the property can be transferred (i.e. payoff an outstanding mortgage, payment property taxes, or a lien against the property). The closing agent prepares the deed and other documents to be signed by the parties and when all of information relating to the transaction is obtained, prepares the HUD –or "settlement statement". This document outlines all the costs for both the buyer and seller associated with the closing. On closing day, the seller signs and delivers the deed to the buyer and the HUD will be signed by both parties. Ownership of the property will then be transferred from the seller to the buyer.

What are the benefits of using a Sarasota Real Estate Lawyer for Residential Closings?

Buying a home is one of the most exciting commitments one makes in their life. It is also typically one of the largest and most significant purchases you will make. The closing is the most important part of the transaction. A new loan is established, a mortgage balance is paid off from the proceeds of the sale, the deed and closing papers are prepared, and the title of the property conveys. Hiring a real estate lawyer can ensure all these documents are properly prepared, appropriately executed and help you avoid common problems with a home purchase or sale.

Even though most real estate transactions use a standard form contract, a real estate lawyer can properly explain the documents and make changes that reflect the best interest of the buyer and/or seller. A real estate attorney has the knowledge and experience to address issues in the purchase agreement including but not limited to:

  • What are the legal consequences if the closing does not take place?
  • What happens if the inspection returns with findings of defects, lead-based paint, asbestos or termites?
  • What the seller has failed to disclose defects in the property?
  • If the seller has altered the property in any way, were the changes properly permitted and approved?

Mortgage loan commitments and mortgage loan documents are complex and many buyers finance a substantial portion of the purchase price. An experienced real estate attorney can review and explain these important documents to the buyer at the closing.

Once the title search is performed, a real estate attorney can review the requirements of the title commitment and can verify that the legal description is correct, determine if there are any problems with adjoining owners or prior owners, and explain title exceptions. The attorney can also determine whether or not there are any legal restrictions that would impair the seller from selling the property, explain the effect of easements or restrictions imposed by a previous owner and ensure the title meets a financial institution's standards.

The closing process can be complex and confusing. The most important reason to be represented by a real estate attorney is the possibility of conflicting interests of parties; not only with the buyers and sellers but at times, the professionals involved can be at odds with one another. A real estate lawyer will provide legal counsel to serve their clients' best interest. Your rights could be at risk if you proceed to closing without a Sarasota real estate lawyer.