You’ve been preapproved by a lender and you’ve found that perfect house after working with a Realtor, and are now under contract.
It is time to hire a lawyer to assist with the legal side of the purchase.
As your attorney, we can assist with the review of your contract and answer any questions you may have regarding it and your responsibilities regarding its terms.
However, the most important and behind the scenes job your lawyer does for you is a 40-year title search.
The Title Search and Title Insurance
The contract you have with your seller should say that the seller will provide you “marketable” title.
The lawyer’s job is to make sure your title is marketable.
What your lawyer will do to make sure title is marketable is to go out to town hall (Vermont records documents in the town the property lies, not the county) and search the land records – pulling the most recent deed, and all the relevant deeds, easements, encumbrances, and other documents of record going back at least 40 years (usually further back).
Title also includes whether the property is in compliance with all zoning and building codes and regulations, as well as State of Vermont wastewater, stormwater, land use, and other permits.
Your lawyer will check all of these records, databases, and indexes to collect all of the information that affects your property.
After the title search is completed, we will draft a document called a Title Opinion. This document outlines what we found on the land records. We send this to you and encourage you to give us a call to discuss it.
If there are any significant title issues, we may call you to discuss those and the best way to resolve them.
We’ll send the title opinion and a “title commitment” our commitment to issue a title insurance policy to your lender.
We also will let the seller’s attorney know any title issues that need to be resolved (including whether there are mortgages that need to be paid off, if there are permits that need to be closed, etc.).
We also recommend and can provide an Owner’s Title Insurance Policy for you to be paid at closing (a one-time premium with no recurring payments) which is provided to you after the deed is recorded.
Title insurance protects you if there are title issues from prior to purchase that arise, even after you sell your home.
When the seller provides us draft seller documents, we will review them against our title work and make sure they are correct and request changes as may be required.
Closing Documents and Settlement Statement
We will also make sure that the seller provides the other required documentation for a closing (for example, if it is the purchase/sale of a single family home that we want to make sure we see a Smoke Detector Certification that will be signed at closing; if it is a Condominium, then we will need a Resale Certificate and a Fire Safety Inspection Report showing no violations, prior to closing, and which is the seller’s responsibility to obtain and provide).
As we get closer to the Closing Date, our office, in conjunction with your lender, Realtor, and the seller’s attorney, will prepare a document called a Closing Disclosure.
This is also known as a “CD” and/or a Settlement Statement. This is the document that lists all the costs associated with the purchase and provides the bottom line of how much the buyer will need to bring to the closing in order to purchase the property.
On the day of the closing, you will meet at our office to go over and sign all of the closing documentation; including the Closing Disclosure, all of your loan documents, the Note and Mortgage.
We will also answer all your questions regarding the documents and the closing overall.
Sellers typically attend the closing as well, to sign the deed and the rest of the sale documents, and it is a great opportunity for the parties to meet each other and Buyers to ask specific questions about the home.
Once all the documents are signed by both buyer and seller, we make some photo copies, disburse checks (i.e. give the seller their proceeds), and you, as the buyer, get the keys and officially own the home! Congratulations!
While you are working on moving into and settling in to your new home, our office will complete “post closing” work; which includes confirming the deed from the seller and the mortgage you signed with your lender were both property recorded, and dispersing all of the funds to the various parties.
As each home and property is unique, there can be many variations and specifics that go into the closing process.
There are additional things our office can assist with, including reviewing the contract, preparing powers of attorney if you can’t attend the closing, or assist in negotiating some tricky points related to the purchase, if they arise, just to name a few.
The Lawyer’s Role
As attorneys we must follow a strict code of ethics and we are monitored by the Professional Conduct Board.
Our job is to represent your interests and, if need be, we can be the “heavy.”
If something goes wrong and you decide not to go forward with the purchase of the property, we are frequently consulted to make sure you give legal notice under the terms of the contract so you will get your deposit back.
The Seller may not be fulfilling their obligations and we may need to act to enforce your rights.
Issues may arise during the walk through that require representation such as when personal property is left at the residence, something is broken, or the home was not left in “broom clean” condition as required by the contract.
While no one wants conflict, we are here to represent your interests and to take on these issues for you, rather than letting you work it out on your own.
Some buyers are afraid to ask for help when these situations because they are afraid of a large attorney’s bill which is one of the reasons at my firm (and some others in the area) we charge buyers on a flat fee basis. We want to be a resource for you!
We do hundreds of closings and as such, can be a good advisor when these situations come up as to the best and worst case scenarios and what we would recommend based on the issue, the parties, and the law.
You always make the decisions on how to proceed with the information we provide, but it helps to have a good real estate attorney on your team.
ABOUT THE AUTHOR
Laura Treu is an attorney at Gale & McAllister, PLLC, one of the most established law firms in the area, representing both buyers and sellers in real estate transactions throughout Chittenden County and the rest of the state. When she’s not negotiating deals and drafting documents for clients, Laura enjoys hiking, biking and running and has completed a few triathlons.