Why to Use a Lawyer at a Real Estate Closing

Florida law doesn’t require homebuyers to have legal representation when completing a residential real estate transaction, so you may have questions about why you might use a lawyer at a real estate closing. While you may purchase a home in Florida and obtain a mortgage without an attorney, you should be aware that a real estate agent or title insurance company cannot provide you with legal advice about the transaction–only an attorney can. Knowledgeable legal counsel can help buyers or sellers identify potential problems and handle them as they arise, particularly when the transaction involves foreclosure properties, waterfront residences, and condominiums, all of which are common types of Florida real estate. If you are planning to buy or sell real estate in central Florida, you should consult with an Ocala real estate lawyer at the Dean Law Firm about your property closing. We may be able to help you navigate through the legal aspects of the transaction process.

Ownership of real estate passes from seller to buyer at a real estate closing. Often, the closing occurs at a real estate brokerage, title company, or real estate lawyer’s office. Unless the closing agent is your attorney, he or she cannot provide legal advice about issues that arise just before or during the closing.

Issues that might require legal advice during a real estate closing include:

• Property tax, or IRS or mechanic’s liens on the property;
• Title defects;
• Property issues noticed during the walk-through;
• Satisfaction of short sale requirements for houses sold for less than the outstanding mortgage;
• Properties occupied by renters;
• Homeowners association (HOA) bylaws and covenants, conditions, and restrictions (CC&Rs) when purchasing a condominium;
• Adequate funding for the closing; and
• Structural defects discovered before closing.

An experienced real estate attorney can identify problems that can affect the closing and how best to respond to these legal issues. For instance, the sales contract might require the seller to complete repairs and remove existing furniture, but at the inspection, you might discover that the seller still has not met these obligations. A lawyer can negotiate and address those issues on your behalf before you sign the final documents.

Parties can use a lawyer at a real estate closing to review the final documents, which may include a warranty deed, a closing disclosure, affidavits related to title, and a bill of sale. A real estate attorney can explain these documents to you and answer any questions you may have about their provisions.

A title search requires an exhaustive examination of public records and property deeds. Issues with title may come up in connection with closing. It can be risky to close if there is a defect in the chain of title. You cannot assume that the issuance of a title insurance policy means that no defects in the chain of title exist that could harm your ownership of the home or adversely impact a future sale of the property.

Not all title defects impact your ownership in the same way, and in some cases, the title company and your own attorney may have a difference in opinion on the significance of the title defect. While your own attorney is looking out for your best interests, the title company is not because it does not represent you and cannot provide legal advice. Your attorney can evaluate the severity of the defect and advise how to resolve the problem.

The lender must provide several important documents at closing. If you’re obtaining a mortgage as a buyer of real property, the loan documents may contain requirements that are difficult to understand. The promissory note will describe the interest you’ll need to pay, and your attorney can review the terms and go over them with you to determine if they’ll work for you. Your attorney can explain the costs of the loan including the lender’s attorneys’ fees, escrow fees, survey costs, appraisal fees, and service charges.

Specific terms that may be required by the lender that you should understand are limitations on your property use, maintaining insurance levels, prepayment penalties, limitation of the right to sell without the lender’s consent, the lender’s right to change interest rates during the loan term, and the lender’s right to change interest rates if you assume an existing mortgage. Using an attorney at a real estate closing can help you determine whether you may borrow additional funds secured by the same mortgage in the future.

If you have legal questions about purchasing or selling property in Ocala, or questions about why you should use a lawyer at a real estate closing, you can discuss your situation with the Dean Law Firm. Michael E. Dean and Timothy S. Dean possess decades of experience providing legal representation to buyers and sellers. Call us at (352) 387-8700 to set up a free consultation or contact us online.