Common Questions Regarding Residential Real Estate Closings
Buying or selling a home is an exciting time, but you may find the process complicated and difficult to navigate. At Thompson Law Group, P.C. & Home Key Title & Closing, Inc., we have over 20 years of experience guiding our clients through the process. We love answering client questions. Here are some common ones our clients ask.
What are the different types of residential real estate properties?
Residential real estate includes the following types of properties:
- Single-family homes
- Manufactured homes
Each type of property has its own advantages and disadvantages. For example, with a townhouse or condo, you won’t have to keep up your own yard and you might share outdoor amenities like pools and playground equipment. However, you will pay a homeowner’s association fee and you will not have the ability to change or decorate the exterior of your property any way you like.
What is involved in the real estate buy/sell process?
A real estate purchase includes the following five basic steps.
- Starting the process with a sales contract and opening an escrow account
- Examining the title through a title search and verification
- Preparing the documents needed for closing on the sale
- Closing on the transaction by signing the documents and settling all funds
- Recording the documents at the county office and making any final payments
What is a title examination?
In order for a buyer to obtain title insurance, an attorney must conduct a title examination. When we conduct a title examination on behalf of a buyer, we search all public records regarding the property to make sure past transfers were done correctly. We also look for any unknown easements, liens or judgments attached to the property. Our goal is to find anything that might affect the buyer’s title to the property after closing so that we can find a way to resolve those issues before closing.
What role does a real estate attorney play in the real estate transaction?
A real estate attorney’s role depends on their client. For a buyer, we may assist with the title search process and review all of the documents they may sign at closing. For the seller, we may prepare certain documents and help clear up any legal issues found in the title search. No matter what side they are assisting, attorneys can make sure all paperwork is in order and that their clients’ rights and best interests are protected.
Do I need to hire an attorney to help with my real estate transaction?
You are not required to hire an attorney, but you should not move forward without a professional to look out for your best interests. We understand the issues that may arise and can spot mistakes before they become problems. We will call attention to potential obstacles and discuss with you the best ways to resolve them. Even if you do not hire a lawyer, you will likely end up paying for certain closing services, such as the title examination or document drafting fees. When you hire an attorney, you have a say in who performs those tasks.
What is title insurance, and do I need it?
Title insurance protects your financial investment in your real estate purchase by insuring your ownership interest, also known as the title. In order to do this, a title agent or attorney searches the property’s title history to identify any potential problems that might interfere with your future title.
If you are taking out a mortgage, your lender will likely require a lender’s title insurance policy. We recommend that our clients also take out an owner’s policy for themselves. Your new home is a big investment, and you should protect that investment.
Are there specific geographic indicators that might affect insurance coverage or the sale of my property?
Yes. Think about homes that are located in a flood zone or a hurricane zone. Those homes are at a higher risk for water damage than other homes. Insurance companies will take such risk factors into account when they issue an insurance policy. Potential buyers may look at them, too. If you are buying a new house, you should research the area and understand these risks. Your insurance may cost more than you expect. Have your real estate professional or insurance provider help you locate a flood hazard analysis before you buy or sell your house.
How do §1031 exchanges play a role in the buy/sell process?
When an investor sells one property and reinvests the sale profits into a new property, they may be able to defer the capital gain taxes, thanks to IRC §1031. This is a tricky process, however, and must be done correctly. We highly recognize using a qualified intermediary such as Asset Preservation Incorporated (API). They are considered an industry leader in these types of exchanges.
Still Have Questions? Give Us A Call.
Let us help you find the answers you need. Schedule your appointment by calling 508-475-5502 or by sending us an online message. We represent clients throughout Massachusetts, Maine and New Hampshire from our office in Westborough.