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real estate closing

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By Nancy Burner, Esq.

Nancy Burner, Esq.

A “closing” in legal lingo is the final step in a real estate transaction. A real estate closing is when the purchaser obtains title to the property, evidenced by a deed from the seller to the purchaser or stock in a cooperative apartment.

Simultaneously, the seller obtains the net proceeds from the sale. This event is usually attended by the seller, purchaser, their respective attorneys, the title closer, the bank attorney (if the purchaser has obtained financing) and the real estate agents.

In our post-COVID world, closings have looked a little different with closings occurring by mail, with parties pre-signing documents and agents not attending closings.

What an attorney does during the closing depends on which party he or she represents. Ideally, all of the complications have been worked out before the parties get to the closing table, although occasionally an issue will arise during the final walk-thru of the property that will need to be addressed.

If there is a bank attorney, he or she is required to have all of the numbers ahead of time so that they can complete the closing disclosure that will provide a detailed itemization of all fees to be paid at the closing and an exact number that the borrower/purchaser will be paying and the seller will be receiving.

The bank attorney provides the documentation required by the bank to be signed by the borrower/purchaser and provides funding only when the title company provides a loan policy to the lender.

The seller’s attorney is responsible for preparing the deed and governmental transfer documents which will be signed at the closing by the parties and for obtaining any payoffs and appropriate checks to pay the liens or judgments that may have been presented in the title report against the property or the seller. The seller’s attorney will typically ask for bank checks for these items to be provided by the purchaser which will be deducted from the total proceeds owed.

The title closer will make sure that any mortgage, judgments or liens are paid off and that any new mortgage will be recorded along with the deed. The purchaser will leave with only a copy of the deed as it will be recorded by the title closer in the county clerk’s office once the closing has concluded.

The title company insures the purchaser as to the ownership and also the lender that their mortgage has priority and is valid. Once the title closer is satisfied with the documentation and has provided the title policies, the closing is officially concluded and the purchaser will be provided with the keys and the seller will receive the checks.

The purchaser’s attorney is responsible for having the purchaser bring the correct checks to the table, explain the lender’s documents, and ensure that the title company is insuring the purchaser’s title to the property.

As you can see, there are sometimes three attorneys present at a residential closing, each with different roles. The main role for any attorney you retain is to protect your interests — whether you are the buyer, seller or the bank.

Nancy Burner, Esq. practices elder law and estate planning from her East Setauket office.