Residential real estate buyers and sellers often wonder what a real estate closing attorney does other than conduct the actual closing. There is much more than you may think. There may be as many as three or four attorneys at the closing representing the buyer, the seller, the lender and the title company.

Usually, the attorney’s office receives a copy of the contact of sale and a “title order” from the lender which provides additional information concerning the loan including the lender contact and the proposed closing date. The attorney then opens a file, enters into an engagement agreement with the client and conducts a title examination on the subject property.

A title examination involves examining the records at the Recorder of Deeds for forty to sixty years or more and is performed to determine the status of title and any encumbrances and liens on the property so that the attorney can arrive at a “title opinion.” The title opinion is used as the bases for the issuance of a title insurance commitment to the lender. Receipt of the title insurance commitment allows the lender to move forward with processing its closing documents. If there are title issues that result in an exception to title insurance in the commitment, those must be resolved before closing and the closing attorney will take appropriate steps.

As the closing day nears, the attorney will also gather information and coordinate with the lender, the buyer, the seller and any real estate agents to finalize the transaction. The closing attorney usually drafts the deed to be signed and delivered by the seller, obtains payoff amounts on the seller’s mortgage and other liens and obtains payoff instructions to ensure those liens are removed to clear title. The closing attorney also

  • obtains tax information and calculates any proration’s of taxes to be included in the closing;
  • determines payment of commissions to real estate agents;
  • provides disclosures in compliance with state and federal law and with regards to title insurance regulations;
  • obtains hazard insurance information and tax information for the calculation and funding of escrow accounts; and
  • calculates transfer taxes and recording fees and distributes the sale proceeds.

At closing the attorney will explain documents to the buyer and the seller and ensure that they are properly executed. The attorney then processes the loan funding, distributes funds through his or her trust account and supervises the proper recording of documents. After closing, the attorney takes steps to see that the liens are properly removed and all title insurance commitment requirements are met. The attorney then provides a final title insurance policy to the lender and the new owner.

There are many “moving parts” to the preparation and conducting of a residential real estate closing and most of the work is performed prior to closing. A competent, experienced real estate attorney will see that the clients’ rights are protected and that the closing is conducted properly according to territorial and federal law.

Nash Davis is Chair of the Real Estate & Financial Services Practice Group at BoltNagi PC, a full service business law firm on St. Thomas, U.S. Virgin Islands.