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The purchase or sale of a home is often the single largest financial transaction that most people will undertake in their lifetime. It is important that you be represented by the attorney of your choice before you begin the buying or selling process. Depending on what representation the parties (seller, buyer, banks) choose and how they elect to share the responsibilities, the lawyer's functions are critical.
There may be as many as three attorneys involved in a real estate transaction: the seller's attorney, the buyer's attorney, and the bank's attorney. In Massachusetts, the bank's attorney can also represent the buyer.
Most lenders appoint a closing attorney to represent them, and the buyer has the option of being represented by that attorney, or choosing another attorney at the buyer's own expense. If you are a seller, it is important that you select your own attorney.
Here are some of the tasks that each lawyer performs in a typical sale:
| Attorney for Seller: |
- Prepare, review, and negotiate purchase and sale agreement.
- Prepare deed to buyer.
- Prepare power of attorney if necessary.
- Deal with title issues raised by the bank attorney.
- Attend closing and review papers that seller is required to sign
- Handle escrows and special arrangements to correct title, complete construction or assure possession.
- Transfer of security deposits and notices to tenants.
- Obtain account numbers/phone numbers for existing lien holders.
- Arrange for 6d Certificates/Insurance Certificates/Release of Right of First Refusal if this is a condominium sale.
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| Attorney for Buyer: |
- Prepare, review, and negotiate purchase and sale agreement.
- Advise on type of ownership to take.
- Advise on issues relative to type of property purchased.
- Advise concerning financing and lender requirements.
- Review home inspection report and other required inspections.
- Review title examination with bank's attorney.
- Attend closing and review papers that buyer is to sign.
- Set up escrows and special arrangements to correct title, complete construction or assure possession.
- Arrange title insurance protection for buyer against losses due to title defects.
- Arrange transfer of security deposits and notices to tenants.
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| Attorney for Bank: |
- Order and review title examination (see below).
- Order and review plot plan.
- Order and review municipal lien certificate.
- Draft note, mortgage, deed and other necessary papers.
- Certify title to the buyer and lender and prepare title insurance policies discuss and consider a declaration of homestead with the buyers
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| Examination of Title |
Title examination requires review and interpretation of all the recorded documents that affect title to the property. These include deeds, mortgages, court decrees and all other filings. The examination must consider the time sequence of transactions and events affecting the title, and apply the law and court decisions to the various situations.
The cost of correcting title defects is the seller's obligation. It is important that the title examination be completed, and that any title defects be corrected by the seller's attorney, before the buyer takes title and possession of the house. This is normally done after the purchase and sale agreement has been signed and financing arranged. A full examination of the title must cover at least 50 years, since many rights and obligations involving real estate may continue for long periods of time.
Some common problems that may affect the title are:
- Current mortgages
- Undischarged former mortgages
- Taxes
- Mechanics' liens
- Estate taxes
- Restriction on use
- Bankruptcy
- Foreclosures
- Divorces
- Attachments and judgments
- Easements (rights of others to use the premises)
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