Helping Buyers & Sellers with Real Estate Closings

It is never advisable to use a standard agreement because no two transactions are ever alike and a standard agreement may not speak to your specific needs. Typically, if I am representing you as a buyer’s attorney, the seller’s attorney or realtor would prepare a draft agreement. I would then review the agreement to make sure that the terms and conditions are not only in accordance with the accepted offer, but that they are also in your best interest. I would take time to add additional addendums with carefully prepared provisions that goes above and beyond the terms of the agreement in order to better safe guard your interest in the transaction. Any experienced real estate attorney who frequently represents both buyer and sellers in any real estate transaction, should be able to prepare the purchase and sales agreement if needed. The final agreement you execute becomes far from a standard agreement.

As your attorney, I would be happy to review the offer to purchase if it is brought to my attention before it is presented to the seller, but most realtors do not bring the offer to the attorneys before it is presented to the sellers for acceptance. If it is brought to my attention, I’ll be happy to make sure that it properly encompasses initial terms and provisions favorable to you before it is signed by you. It is important to keep in mind that the offer to purchase is a contract. That means once it is accepted, the parties are bound to the terms and therefore, they should be taken seriously.

Once the offer is accepted. The next phase is for the parties to abide by the terms of the offer. Which could either be for the buyers to attend to any inspection contingencies or the parties can go straight to preparation and execution of the Purchase and Sales Agreement. Depending on who you are in the transaction, for example, if you are the buyer, the seller’s attorney or seller’s agent will normally put the initial draft of the Purchase and Sale Agreement together which upon execution by the parties, becomes the final agreement, notwithstanding what was stated in the offer. It is in your best interest to have the agreement reviewed by an experienced real estate attorney in order to ensure that your interest is protected in the transaction before it is signed. Once the purchase and sales agreement are signed, it becomes the final agreement between the parties.

The Buyers and all parties with legal authority to sign closing documents are normally required to attend the closing. The sellers have the option of conveying power of attorney to their attorney who can attend the closing on their behalf or make arrangements to have all documents delivered to the closing attorney prior to the closing, if they are unable to or not willing to attend. The buyers on the other hand, have a limited option if they cannot attend. They must notify the financing bank well in advance of closing so that a power of attorney can be prepared, reviewed and approved by the bank prior to closing.

The financing bank will usually provide an estimate of fees, known as a Good Faith Estimate (GFE) to each borrower/buyer so that they are better prepared with all cost associated with their purchase or refinance. The standard closing fees are the settlement fee, title insurance policies, plot plans, municipal lien certificate, appraisal fees, application fees, credit report, taxes and recording fees. There may be more in-house fees charged by the lending institutions but they will be disclosed in the GFE provided by your bank in order to make sure you are aware and can afford the necessary funds associated with your purchase. We can also review and help you understand any of these fees.

Most banks will allow the buyer to find an attorney of their choosing who can represent them and conduct the closing for them. This is generally known as a dual representation because one attorney is able to represent the buyer’s interest as well as the lender’s in the same transaction which can be cost effective and usually the best option for the buyer, who will work with one attorney from the beginning of the transaction to the end. Since the lender knows that the buyer may be able to get better fees, the lender may tell the buyer that they can shop around to get better fees. While it may sound fair to shop around for fees, it is more important to have the assistance of good and experienced real estate attorney by your side. Purchasing a home is one of the biggest investments most of us will make in our lifetime, the buyers, especially first-time home buyers need all the guidance they can get. As such, the assistance of a good and experienced attorney is priceless and should be the main focus of your transaction as the variations in fees are typically mild.

The best way to save money on a real estate purchase is to ask the sellers to pay your closing cost. But this must be done as part of the terms of your offer before it is presented and accepted by the sellers. This is why the offer stage is very important and should be put together only after careful consideration.