The Role Of Real Estate Lawyers During Closing
During the purchase or sale of a home, real estate agents and our clients have one major thing in common: real estate lawyers can be our best friends.
While more experienced clients and Realtors® will have a great handle on the overall process of completing a transaction, at the end of the day, it’s really the real estate lawyer that will ensure that everything is in place for the transaction to be made safely.
Real estate lawyers really earn their pay on closing day, when the pressure is on for a transaction to be legally finalized in time, and that every particular detail of the transaction contract has been accounted for. Here’s what that looks like from the perspective of a qualified and knowledgeable real estate attorney.
What’s A Real Estate Lawyer’s Job?
Overall, a real estate lawyer’s job is to ensure their clients’ best interests and legal rights are being protected throughout the course of a real estate transaction, namely within the Agreement of Purchase and Sale document.
Among many other things, one large aspect of their job is to ensure that you as the buyer or seller of a home have the title of the property in question correctly allocated. This means that buyers receive the title of their new home and sellers have their name taken out of the title.
Real estate lawyers are also responsible for dealing with legal matters that are related to the property and the Agreement of Purchase and Sale contract. If there are any disputes between the buying and selling parties, let’s say with a stipulation in the terms and conditions of the contract, it’s up to the real estate lawyers from both sides to handle the dispute and find an agreement.
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What Do They Do In The Lead-Up To Closing?
While most of the action for a real estate lawyer takes place on closing day, there are some very important duties they need to complete before that stage of the transaction. For instance, there are a lot of crucial (yet seemingly boring) documents they need to prepare in order for the deal to go smoothly on closing day.
A few of the documents in question include:
- Sales tax documents accounting for any and all additional items included in the sale that are not the property itself — things like chattels are included in this document.
- Documents to be submitted to the land registry office, which will grant a government guarantee of the transfer of land title on closing day.
- Ensure all mortgage documents are signed off by the buyers and that the sellers have made adequate arrangements to compensate their lawyers’ fees directly from the mortgage funds.
It’s also the real estate lawyers’ duty to prepare what’s known as the Statement of Adjustments, a document that allows for both buying and selling parties to transparently see how the overall financial structure of the transaction will work. In this document, items like property taxes, condo fees, and deposit amounts will all be highlighted so that the full and final costs of the transaction owed from the buyer to the seller are apparently clear.
While a great real estate lawyer is invaluable to the processing of a transaction, it’s your real estate agent that works hard to orchestrate the entire deal from beginning to end. Get our advice on how to Find A Top Real Estate Agent here.
What Do They Do On Closing Day?
On closing day, the duties of a real estate lawyer really kick into gear. Their main objective on closing day is to ensure every little contractual and legal detail has been accounted for so that the transaction can be completed before the Agreement of Purchase and Sale expires at the end of the day.
On closing day, real estate lawyers’ primary responsibilities follow somewhat of a common course. First, they’ll need to ensure the title of the property in question will be adequately transferred into the name of the new buyer and that there were no late claims against the transfer.
Second, real estate lawyers will work to release the funds owed from the buyer’s trust account to the selling party and their real estate lawyer. The buyer’s real estate lawyer is also responsible for overseeing the payment of any fees due on the closing day that are outlined in the Statement of Adjustments document. These commonly includes things like sales taxes, property taxes, condo fees, land transfer taxes, deposit amounts, and real estate agent commissions.
Finally, the real estate lawyers from both parties will exchange legal documents with one another along with passing the seller’s keys to the home in question to the new homeowner. From there, the transaction is largely finalized, and all that’s left for real estate lawyers to do is provide their clients with a Reporting Letter, which includes a copy of all the transaction’s legal documents along with their personal lawyers’ fees.
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How To Find A Great Real Estate Lawyer
As you’ve probably gathered throughout reading this article, real estate lawyers have a lot of responsibilities to undertake. It takes a lot of legwork behind the scenes for real state lawyers to ensure clients’ needs have been met, they’ve adequately represented their clients’ best interests, and that the transaction as a whole can be completed smoothly.
Whether you’re a buyer or a seller in a real estate transaction, having a talented and experienced real estate lawyer can make an enormous difference in the outcome of your transaction. If a lawyer overlooks a key detail or doesn’t complete a duty in time, your entire transaction could be cancelled or it could end up costing you a substantial amount of money down the line.
That’s why it always pays to have a great real estate lawyer on your side going into any real estate transaction. But finding a reliable and honest one you can trust is easier said than done. We always recommend speaking to a few different real estate lawyers before deciding to hire one in particular.
Our advice is to speak with any friends or family that have successfully completed a real estate transaction recently and ask them about who their real estate lawyer was. Also, do your own research on who the most publicly recommended real estate law firms are and contact them. In addition to all of that, refer to your real estate agent or brokerage and ask their advice on who you should hire. Real estate agents deal very closely with real estate lawyers throughout the duration of a transaction and will be able to offer you very valuable advice on who you can trust.
At Royal LePage Real Estate Professionals, we can do much more than just connect you with the most honest, trustworthy, and talented real estate lawyers currently in the business. Find out more about Our Mission And Values here to see why our clients continue to come to us with all of their real estate needs.