As a real estate lawyer for Rockland County I have been closing loans since I’ve been admitted to the New York State Bar. Although I planned on practicing mostly criminal law, our country was in a strong real estate market around the time I graduated and the attorney’s I first worked for were representing lenders and I started doing the same.
Representing lenders offered me an excellent view of all jobs related to real estate closings from Title Companies and Agencies, Mortgage Brokers and Financial Institutions, Realtors and Buyers and Sellers Attorneys as my job as Closing Agent required me to effectively communicate and schedule with all of them. I represented Lenders from the time I was admitted to the Bar in 1997 up to the Economic Crisis of 2007-08. As a Settlement Agent for the lender, my primary job was to make sure that my client, the Bank was in first position and could foreclose in the event the borrower defaulted AND that there were no stains on title which would render the property non-marketable in the event of a foreclosure so my client could sell the property and get their funds back. It was also part of my job to schedule with the buyers and seller’s attorneys, disburse funds and review title. This position afforded me a bird’s eye view of all the other positions responsibility and helped me to represent buyers and sellers interests in subsequent closings when I represented buyers and sellers.
As a Buyers Attorney my job is to make sure my client is getting what he/she believes they are getting. I pick the Title Company and I order the Title Report. It’s my responsibility to either find a previously done survey and see that it’s still accurate and have it recertified, or, order a new survey and have it read into my client’s Owners Title Policy and that the Owners Policy covers the “Metes and Bounds” Legal Description contained in the Schedule A of the Title Report. The last thing any buyer wants is to learn AFTER the closing that there is some sought of easement or right of way on the property they just purchased and there is nothing that can be done about it as that easement, variance or “right of way” runs with the land and should have been discovered by a survey BEFORE the closing.
It’s also part of my job to protect my clients down payment and to review the Contract of Sale to make sure the seller is agreeing to a high enough amount of money to cover any possible violations to title that may appear in the Schedule B of the title Report and to communicate with the Sellers’ Attorney to make sure his client is clearing any violations that may appear, like a deck that has not been repaired to code. I also must review the adjustments the Sellers Attorney provides to make sure they are accurate.
I also review the loan documents to make sure the Lender is complying with their responsibilities to Borrowers pursuant to RESPA (the Real Estate Settlement Procedures Act) and TILAZ (Truth in Lending Act) and that the lender is not playing some sought of “bait and switch” and that the actual costs are within 10% of the costs listed on the Good Faith Estimate and in the event the loan is some sought of high cost loan, the lender has provided all the necessary disclosures. I also perform various other tasks such as making sure there are no problems if the Seller is remaining in possession for a period of time after the closing because their new place isn’t ready to move into yet. I would draft an Escrow Agreement and have the seller leave some of their proceeds in escrow in the event they cause any damage in the process of moving out. I would further have a “hold harmless” agreement drafted and executed to protect my client in the event there was any accident on the property that could cause my client to have liability.
As a Sellers Attorney, its my job to draft all the documents, the Contract of Sale, the Bargain and Sale Deed and other transfer documents. I hold the down payment in my Escrow account. After the Buyers Attorney forwards a copy of the Title Report to me, I need to inform my client what violations have appeared and have my client clear the violation and provide proper proof to the title company so they may be omitted from the title. It’s also my job to make sure the closing moves along at the proper speed so that there will not be an untimely default that costs my client the real estate season. Most residential property is sold in the late spring or summer in the North East. People want to move in over the summer and have their kids start the school year in their new school. It is true that a purchase can occur any time of the year, but its more likely to occur in the late spring or summer.
As a Sellers Attorney, I need to be cognizant of the Mortgage Contingency contained in the Contract of Sale and make sure the Buyers Attorney gets me his/her client’s Mortgage Commitment and make sure the Buyer is locked in and cannot back out of the Contract. I would inform my client whether the Buyer received their commitment and are locked into the Contract of Sale. Sometimes a Buyer waives their mortgage contingency. When that happens, I tell my client that they could return the down payment and cancel the Contract and still re-list the premises so as not to miss the current real estate season, or, in the alternative, if the buyer cannot close after waiving their mortgage contingency, we can inform the Buyer that in the event they cannot close in the time allotted in the Contract of Sale, he/she will forfeit their down-payment pursuant to the liquidated damages provision in the Contract of Sale and that will cover the carrying cost until the next real estate season starts in March. Usually it’s best to return the down-payment and find a new buyer so my client doesn’t end up being sued for the return of the down-payment while he/she is trying to go back into contract with another buyer. Every transaction is unique though and sometimes a down-payment is forfeited to a Seller.
I have closed many loans from all three angles. If your planning on buying or selling a house, call me, I’ll make your closing go smoothly. I’m Paul Silk Cooper from the Silk Cooper Law Firm, P.C.