The main objective of the buyer’s attorney is to ensure that there are no legal problems with the property being sold.
Legal problems affecting real estate can arise from lawsuits, bankruptcies, divorces and improperly administered estates. They can also derive from unpaid real estate taxes, city fines, assessments, zoning violations, etc. There may also be problems with the property’s boundary lines. For instance, a driveway or a fence may be encroaching on the neighbor’s land.
Any of these problems could cost a small fortune to fix and it’s the lawyer’s responsibility to ensure that none are present when the buyer purchases the home.
Thus, prior to the closing, the lawyer must order and review a title exam, a survey and a municipal lien certificate.
A colleague of mine once said “You can’t call yourself a ‘real estate attorney’ unless youdo your own title exams.”
The title exam is probably the most lawyerly part of the real estate attorney’s job. It involves reviewing all legal records affecting the property over the prior fifty years.
The lawyer must exam documents in the registry of deeds, the probate and family court, and the bankruptcy court.
He needs to verify that all mortgages have been paid off and released, all divorce judgments have been followed, all estates were properly administered, all liens have been discharged, etc.
Most real estate attorneys do not conduct their own title exams. Instead they employ other attorneys, like myself, to do the research for them and to provide them with a written report of the property’s title.
The cost of a title exam can vary greatly. I’ve seen examiners charge anywhere from $125 to $390 for their services. But the average cost is around $200.
The buyer’s attorney will also order a survey of the property. This is to ensure that there are no issues with the property’s boundary lines. The survey will show if structures such as fences, driveways, decks, sheds, or pools cross over your boundary line and on to your neighbor’s land or vice versa.
The average survey costs between $175 and $250.
Municipal Lien Certificate
Finally, the buyer’s attorney must obtain a municipal lien certificate (MLC) from the city or town where you’re buying real estate.
The document is provided by the tax collector’s office and it shows what’s owed for real estate taxes, municipal fees and assessments.
The MLC typically costs between $25 and $50.
Preparing Closing Documents and Disbursing Funds
The buyer’s lawyer will prepare all closing documents necessary for obtaining the mortgage and purchasing the home. Such documents include a closing disclosure, a promissory note, and a mortgage.
He will also manage all the money needed to complete the transaction. If the buyer is getting a mortgage, the bank will wire the loan directly into the lawyer’s escrow account on the day of the closing. If the loan is not sufficient to cover all expenses, the buyer will provide the remaining funds. This is usually done by bring a bank check to the lawyer’s office on the morning of the closing. These funds will be deposited into the lawyer’s escrow account along with the bank loan.
The lawyer will then use the funds to pay for all of the closing expenses. Thus the buyer will not need to bring one check to pay his lawyer, another to pay the surveyor, another for the title exam, etc. Instead all checks will be written and distributed by the buyer’s attorney. The seller and all vendors involved in the process will be paid through the attorney’s account.
If you have any questions regarding real estate law, please contact me via email at email@example.com.