When I am introduced to a buyer, the first thing I do after congratulating them, is answer any immediate questions and talk about next steps. Even for those who have been through the process before, closing on a home can feel like a daunting process.
We talk about who they are using for a lender because not all clients go into the process understanding that there are two possible scenarios. The first includes representation of just the buyer, the second includes representation of both the buyer and the lender. Most lenders will allow buyers to use their own attorney to handle the closing, but some do not – they have what is called a ‘closed list’ and the buyer must choose from the list.
If I am unable to handle the closing, I can still represent the buyer and support them at all points between the accepted offer and closing, which includes negotiating the P&S, reviewing the final figures and attending the closing.
I have created this timeline for clients to use as a more detailed guide through the steps in the process, and I hope that it's helpful to you.
OFFER TO PURCHASE
Submit an Offer in writing with a deposit ($1000+).The following terms will also be included in the Offer:
- Date the Purchase and Sale Agreement (“P&S”) must be executed;
- Date by which the buyer must submit a loan application;
- Mortgage commitment date;
- Closing date;
- Any additional terms, such as closing cost credits, inspectional items, review of condominium documents; anything the P&S will be subject to or contingent upon.
PURCHASE AND SALE AGREEMENT (P&S)
The P&S takes the terms from the original offer and adds them to a long form contract that supersedes the offer once it's signed.
- Buyer’s and seller’s attorney negotiate the terms of the P&S;
- P&S is signed and the buyer delivers the second deposit check;
- The real estate agents coordinate the signing of the P&S which can be done electronically.
- Buyer decides what lender they are using and submits a loan application which can be done prior to the signing of the P&S, but the lender will need a fully executed copy of the P&S to move forward;
- Buyer provides documentation required to ensure that the lender is able to provide them with a commitment letter on or before the mortgage commitment date;
- Ideally, this letter will have no conditions that need to be met prior to closing, though often it will have some minor requirements (e.g. copy of recent tax returns, copies of bank statements, etc.);
- Buyer obtains homeowner’s insurance (not applicable for condominiums);
- Buyers of a condominium may choose to purchase H06 insurance, which is coverage on the internal items/belongings – not all lenders require this, but it is highly recommended.
- Once the financing is in place, the buyer will receive a Closing Disclosure (CD), including the amount the buyer needs to bring to closing, from the lender who is required to deliver this to the Buyer three days prior to closing;
- The buyer may wire the funds to the closing attorney’s office or provide them with a bank check or money order;
- A final walk through of the property should be done just prior to the closing, either the day before or the morning of the closing;
- Buyer brings a photo ID to the closing along with the funds required to close;
- Once the closing is completed, the documents will need to be recorded at the appropriate registry of deeds before the Buyer is the record owner. As long as the closing is completed early enough, the documents should be recorded the same day (registry stops recording at 4pm);
- The Buyer’s broker or attorney will hold the keys until everything is on record and then the Buyer may take possession of the property.
Stephanie graduated from Suffolk University with her BSBA in Business Management and then went on to graduate from Suffolk University Law School in 2002. She later returned to school and attended Boston University School of Law where she obtained her LL.M. in banking and financial law. Since 2000, Stephanie has been involved in residential real estate. She has not only represented buyers, sellers and lenders in real estate transactions, but she also represented lenders in foreclosure matters. While Stephanie worked as in-house counsel at a non-profit organization in Roxbury that focuses on foreclosure prevention, she worked to prevent the displacement of families and neighborhood destabilization. Stephanie is also a member of the Real Estate Bar Association, Boston Chamber of Commerce, Beacon Hill Network, as well as the Boston Business Builders. You can connect with her here.