(also referred to as the Closing Attorney)
Prepared by the Grand Gables Team
Once you have decided to either buy a new home or sell your current residence, you have begun a process that will entail one of your most important financial decisions. The process will involve many players, reams of paperwork and legal documentation, and quite possibly, many attorneys. How is each attorney´s role defined and who represents your interests? Each attorney involved in the closing process has his/her own set of responsibilities and duties. Here is a brief outline of the role that each attorney performs in a standard real estate transaction.
The role of the "Closing Attorney" (the attorney representing the Buyer´s Lender) is a varied one, for although the closing attorney represents only the lender, he/she will typically be the liaison for all the parties involved in a particular transaction: the buyers, sellers, realtors, lender, title insurance company, surveyor, and the buyers´ and seller´s legal counsel. As the attorney for the lender, the closing attorney is responsible for certifying the title to the property to both the lender and buyer, preparing the documentation and settlement statement for the closing, and conducting the closing and disbursing the mortgage and other proceeds in conformance with the lender´s instructions. Unless otherwise engaged, the closing attorney does not represent the interests of the buyers or the sellers.
The sellers´ attorney represents only the interests of the sellers. The sellers´ attorney will review and amend the Offer to Purchase and the Purchase and Sales Agreement (also referred to as the P&S Agreement) and will negotiate the terms of both documents with the buyers, their realtor and /or their attorney. The sellers are responsible for clearing up any title matters disclosed by the title examination ? it is the closing attorney´s role to disclose the problems but it is the Sellers´ responsibility to clean them up. To the extent that the sellers´ are obligated by the P&S agreement to remove any defects in title, they will probably have to retain independent legal counsel.
If the buyers engage their own legal counsel, that attorney will represent the interest of the buyers only. The buyers´ attorney will review and amend the Offer to Purchase and the P&S Agreement, negotiating the terms of each in their client´s best interests. The attorney will also review the title and the plot plan with the closing attorney to ascertain whether the exceptions to the title are standard or whether there are easements, restrictions, or other rights which interfere with the use of the property. The buyers´ attorney will also typically be in contact with the buyers´ lender, the realtors and the sellers´ attorney before the closing to resolve any outstanding issues between the buyers and sellers or the buyers and the lender, and to confirm that all closing conditions have been met or will be met at the closing.
The buyers may choose to be personally represented by the lender´s attorney. Under the rules of the Supreme Judicial Court governing the representation of multiple clients, an attorney is permitted to represent multiple clients if he/she can adequately represent the interests of each and if there is no inherent or obvious conflict between the clients´ interests. If a conflict arises during the course of the transaction, or if the buyers, the lender or the attorney feels that the attorney cannot exercise independent legal judgment on behalf of either client, then the attorney must withdraw from representation. Dual representation benefits the buyers by reducing the total cost of legal fees: The buyers only pay once for the attorney to review the title, obtain from all parties any documentation/information needed in anticipation of the closing, and prepare and review with the buyers all closing documents and costs.
If you would like more information or still have questions, feel free to contact us and one of our agents will be happy to help!