John Doe Dear John, Thank you for permitting me to assist with your purchase of the above–referenced real property. I look forward to working with you, and will do my best to handle this closing to your satisfaction. We may be called upon to prepare a deed from the seller. It is assumed that the basic terms of the sale transaction have been agreed upon between the seller and the buyer and that we have no obligation to bargain for either. Do you want a survey (circle one)? Yes No If no, please fill out the agreement below. SURVEY HOLD HARMLESS AGREEMENT Buyer(s) have been advised that a typical physical survey of a residential lot costs approximately $400.00. Surveys for larger tracts and raw acreage generally are more expensive. Buyer(s) hereby confirm that Buyer(s) knowingly and voluntarily elected not to order a survey of the Property. IN WITNESS WHEREOF, Buyer has executed the Acknowledgment of Waiver of Survey as of the ______ day of _________________, 20___. By: __________________________________ By: __________________________________
Sample RE Closing Engagement Letter
12 Main Street
Durham, NC 27713
Your closing date is scheduled for August 1st at 10:00 a.m. at my office. Closings are scheduled to last approximately one hour. Please note that even if your spouse is not to execute loan documents, such as the note itself, North Carolina law dictates that a spouse must execute the Deed of Trust itself. Therefore, if a spouse is not able to attend closing, prior arrangements (such as execution of a Power of Attorney) must be made well in advance of your closing date. Please bring to closing a valid drivers license or other picture identification for use by the notary public.
FUNDS AT CLOSING:
Pursuant to North Carolina State Bar regulations, the amount due from you at closing must be in the form of either certified funds or confirmed wire transfer of funds. Checks should be made payable to “ROSNER LAW FIRM, P.A.” If you plan to pay by check, it should be delivered to us no later than the commencement of the closing. If you plan to pay by wire transfer of funds, these should be wired into my account so that the wire transfer has been completed at least twelve hours prior to closing. Please contact me if you need wiring instructions.
You will be provided with the amount you will need to bring to closing no later than 24 hours before closing, provided all necessary information has been given to us by Buyers, Sellers, Lenders and Agents to properly prepare the settlement statement and other closing documentation. Please make every effort to provide your lender as soon as possible with all information that they request in order to avoid a delay in closing. Please be aware that more often than not, we receive a closing package from the lender at the last minute before closing and that we are not able to provide you your final numbers until we receive and have a chance to process this package. In the event that there is a delay on your lender’s part in delivering the loan package and the loan funds to our office, we may have to reschedule your closing. It is helpful in this process if you encourage your lender to deliver the loan package and fund at least 24 hours in advance of your scheduled closing.
Please be aware that disbursement of funds will not take place at the time of closing. North Carolina law requires that good funds be received from the buyer and lender, that the title be updated and that the deed and loan documents be recorded at the Register of Deeds before any funds can be disbursed. This requirement also means that you will not be entitled to receive keys or move into the property until recording has taken place. The documents are sent by courier to the Register of Deeds after you sign your closing documents in our office. Closings that are completed before 2:00 P.M. will be recorded and disbursed by 5:00 P.M. the same day. Closings after 2:00 P.M. may not be recorded and disbursed until the next business day. For example, this means that a Friday afternoon closing might not get recorded, and thus you could not move in, until Monday. Please keep this timing in mind as you coordinate your moving arrangements; the seller may not give you the keys or let you move in or have access to the property prior to recording.
WHO WE REPRESENT:
We represent you in the matter of ensuring that you acquire good and marketable title to the property. We can also advise you on legal questions concerning title to your property, title insurance and the covenants and conditions of your loan documents. In the event of a dispute between you and the mortgage lender, we will not attempt to represent either party.
We represent the mortgage lender to the extent of assuring full compliance with its loan closing instructions. We typically do not advise you with respect to the terms of your loan (i.e. your loan amount, interest rate, conditions for later conversion or refinancing, necessity or amount of mortgage insurance). You should obtain from your lender your closing instructions or other documentation stating your final loan terms and resolve any issues, disagreements or disputes concerning the terms of your loan with your lender before closing. In the event of a dispute between you and your mortgage lender, we also are not permitted to undertake representation of either party, but we will facilitate your communication with your lender at closing if necessary.
Secondarily, I also represent the lender to the extent of assuring full compliance with its loan closing instructions. This is not considered to be a conflict of interest by reason of the fact that I have not been engaged in negotiation of your loan terms nor do I have any discretion regarding the lender's documentation. The documentation must be completed precisely as required by the Loan Instructions. Therefore, I may not vary the instructions in such a way that would be either beneficial or negative to your interests. Additionally, if I found out that you were committing fraud, I may be required to disclose it to the Lender, and I certainly could not continue with the representation. An example would be if you were purchasing the property as an investment but have indicated to the Lender that this is your primary residence.
Because of the numerous difficulties that can arise during the loan processing procedure, we ask that you remain in close contact with your mortgage lender. Last minute delays in closing can usually be avoided if you determine in advance what conditions must be met by you.
The North Carolina State Bar stated in ethics opinion 2004 FEO 10 that an Attorney “may prepare the deed as an accommodation to the needs of her client, the buyer, without becoming the lawyer for Seller,” and that certain disclosures must be made to the Seller before doing so. Any representation of the Seller under these circumstances is very narrow and limited.
WHAT SERVICES WE PERFORM:
We update the title to the subject property, ensure that the deed of conveyance and loan closing documents have been properly prepared and executed, that the closing funds are properly received and disbursed pursuant to the HUD-1 Settlement Statement prepared by this office and reviewed by you at closing, that the survey is ordered and reviewed by this office prior to closing, that the transaction is properly closed, that the deed and deed of trust are duly recorded that the owners’ and lenders’ policies of title insurance are issued and delivered in proper form and that mortgages and liens paid off at closing are properly cancelled.
Normally, we will “tack” to the prior owner’s title insurance policy. This means that our title examination would begin with the date and time of issuance of that policy, and we will not certify the status of the title to the property prior to that date. While defects in the title occurring prior to our search period would not be reported by us if we “tack”, these should be covered by the existing title policy, so you should receive the same title insurance coverage as if we had conducted a full title examination. “Tacking” enables us to conduct the title examination more expeditiously, and it should not expose you to any increased liability. In addition, tacking may permit a lower premium to be charged by your title insurance carrier due to reissue rates being offered. However, a normal Title Insurance Policy does not cover restrictive covenants, conditions and easements. When tacking to a policy, our office will not be able to provide you with a copy of restrictive covenants, conditions and easements that have been recorded prior to the search period. If you would like to see the restrictive covenants, please let us know and we will explain how to view them. Please keep in mind that most Offers to Purchase contain language that Buyer is advised to read all restrictive covenants, by-laws, etc. before signing the Offer.
The advantage of a longer search period, typically 30-60 years, is that it gives you more certainty about the status of your title. Even if the title company agrees to provide you with full coverage and pays for your attorney’s fees and damages, you must still endure the stress of litigation and uncertainty about your ownership rights to your home. Additionally, if there are any problems, your title could be insurable but not marketable. What this means is that a future purchaser may be able to get out of buying your property when you sell it because you can’t provide marketable title. If you would prefer a full search, please advise me in writing or by email within one week from the date of this letter so that I have sufficient time to perform this service for you. There is a charge of $450.00 (in addition to the fees quoted below) for this type of examination.
It is our responsibility to see that you get clear title to the property in question, free of liens and encumbrances. PLEASE BE AWARE that matters of zoning and environmental hazards are not included in a standard title examination. Zoning laws affect permitted uses of property and the location of improvements thereon, among other things. Environmental hazards include, but are not limited to, the existence of radon gas, lead-based paint, underground storage tanks, asbestos and whether your property is located in a flood hazard area.
If you have any questions or problems with the scope of the title examination, please contact me.
As part of our title opinion, we will certify that you have access to the property (ingress, egress and regress). We do not certify whether the road is publicly maintained or what the nature of the access is (for example, if you are purchasing a vacant lot and intend to subdivide it and create many additional lots, you may be overburdening an access easement).
We will obtain a policy of owner’s title insurance in your favor and a policy of mortgagee insurance in favor of the lender. You will be required to pay the title insurance premium. We will do our best to obtain the policies at the rate most favorable to you. You have the right to select the title insurance company; and pursuant to North Carolina General Statutes Chapter 58 and Section 75-17 and applicable sections of the Department of Housing and Urban Development Regulations contained in RESPA, the lender or Realtor may not require you to use a particular title insurance company or agency as a condition of the contract or loan approval.
There is also enhanced title insurance coverage available. For instance, a typical policy would not cover you against encroachments built by a neighbor after the date of the policy or survey coverage for certain risks if you don’t have a survey. This policy typically costs 20% more than the standard policy and would only be ordered if you request it. Please contact me if you need more information or would like to request this policy.
For a purchase transaction, our standard fee is $500.00. There is also a $25.00 handling fee to deliver the closing package to the lender. When there is more than one loan, there is an additional $250.00 processing fee for the 2nd loan package (if the lender pays for the attorneys’ fees) and another $25.00 handling fee. Many lenders will pay the attorneys’ fees for an equity loan. If the lender will not pay the attorneys’ fees, I will discount my processing fee to $150.00. We do not like to accept email packages due to the difficulty we have had with them and the problems they cause. Oftentimes lenders will use email packages as a way to get the package to us at the last minute allowing no time to look it over and increasing the probability of errors. Additionally, there are extra computer and printing costs associated with it. However, we will accept email packages at no additional charge for the first printing. We will charge $10.00 for each time we have to reprint an email package due to an error that is not our fault. We will request that Lenders send the packages handling. We strongly advise you to follow up with your lender and make sure they have everything they need to get the loan through underwriting so that there are no delays and that they can get us the package in plenty of time for the closing.
If we are required to perform additional services beyond those already described, there will be an extra charge. Examples include preparation of powers of attorney, release deeds, subordination agreements, paying off other debts that are not a lien on the real property at your request or your lenders, last minute closings (see next section), or delay or postponement of the closing through no fault of our own after the closing documents have been prepared.
Please be aware that the title search and survey for your property can take a substantial amount of time; hence, unless we hear otherwise from you, we will begin this work shortly after I have been retained to perform this work for you. PLEASE UNDERSTAND THAT WE MUST CHARGE FOR ALL WORK PERFORMED FOR YOU EVEN IF YOUR TRANSACTION FAILS FOR ANY REASON. THE SAME HOLDS TRUE FOR ANY WORK WE ORDER (such as a survey).
LAST MINUTE CLOSINGS:
Too many times, Lenders have tried to send packages at the last minute for a variety of reasons. This causes extra work for us and increases the likelihood of errors. The smoothest closings are where the Lender has sent everything a couple days in advance. I always strive to respond to the Lender’s Request for Title and other requests as quickly as possible so they have everything they need from me to get started with their underwriting process. In addition, follow up calls or emails are sent to make sure they have everything they need from me and that they are aware of the closing date. Unfortunately, I still receive packages at the last minute or after hours.
Therefore, in order for the closing to take place as scheduled, I now require that the loan package arrives at my office at least 21 hours before the scheduled closing time. Otherwise, we can either reschedule the closing or my fee will be increased $250.00 for the time and effort that will be put in. If this happens, I will contact you directly and see how you want to proceed. You are always welcome to ask the Lender to pay this fee, and I will disclose this to them when I send them my fee sheet. I do reserve the right to postpone the closing (at no charge) even if you are willing to pay the extra fee if I have other commitments that will make it impossible to get the closing done in the limited time frame.
If you are buying an existing home, you typically have the right to and should have the home inspected by a licensed home inspector. Take care to make sure these inspections are performed prior to any deadline for same in the contract and immediately communicate any desired repairs to the Seller. Thereafter, be sure the Seller is making the repairs to which you have agreed. Begin this repair review process as soon before closing as possible in order that closing not be delayed by issues related to lacking or improper repairs.
Please note that repairs need to be paid at closing or a repair credit needs to be on the settlement statement. I will not close a loan that has the Sellers paying money to the Buyers outside of closing without the Lenders written approval. In most cases, you will not be able to get written approval from the Lender because they don’t even want to know about it.
We recommend that a new survey be obtained to determine among other matters, if the property is located in a flood zone (thus possibly requiring flood insurance), if any closure errors, minimum square footage violations or property line encroachments exist or if the improvements on the property violate any set-back requirements stated in the restrictive covenants or on any recorded map of the property. Your lender may indicate that it does not require a survey. Nonetheless, your lender still may be protected against issues related to surveys under its title insurance policy, while you may not have such protection. Without a new survey, your title insurance policy in most instances will not provide you coverage against issues related to a survey (even though your lender may be protected). In addition, without a survey, you may be unaware of any potential issues until you sell your home- at which time it may be too late to effectively remedy the problem.
Should you request a survey, we will be responsible for ordering the survey and will try to do so approximately two weeks before closing. Original surveys will be given to you at closing. Please note that the mortgage lender often requires a current map or survey of the property. The cost of a new survey will be your responsibility and will be collected from you at closing or billed to you if the transaction does not close.
If the residence is new construction, the Sellers should furnish you with a soil treatment guarantee at or prior to closing. Otherwise, the mortgage lender will require that the improvements on the property be inspected by a licensed exterminator and a termite report prepared and submitted prior to closing. Normally, the mortgage lender will not fund the loan until it has received and reviewed this report. You or your Realtor should order the report and see that it is delivered to us and the lender as soon as possible, and no later than five (5) days prior to closing so that we will have an opportunity to review it and resolve any issues which may arise therefrom.
Your lender requires that the improvements on the property be insured against flood, fire and other casualties with a reputable company and that insurance must be in place as of the date and time of closing. You or your Realtor should order the hazard insurance policy and see that it is delivered or faxed to us and your mortgage lender as soon as possible, but no later than five (5) days prior to closing. Your lender needs this information before finalizing your loan documents.
Homeowners Associations are not a matter of public record. We attempt to determine if one exists and, if so, obtain necessary information to prorate the dues. However, it is advisable that you or your agent also contacts the association as we do not become involved in various compliance procedures of the several management companies relating to transfer of their records to your name. Likewise, you should routinely arrange for transfer of electrical service, telephone and municipal utilities.
You will receive copies of your loan documents and title commitment. If there are additional documents you need copies of, we are happy to provide them to you. Please keep in mind that I intend to destroy your file six years after the closing date. If you have any problems with this, please let me know in writing and we will come to a mutually agreeable arrangement.
Please do not hesitate to contact me with any questions or concerns regarding your upcoming closing. I will do all I can to complete this transaction on your behalf in a timely and efficient manner.
Very truly yours,
RECEIVED BY AND REVIEWED BY:
Buyer(s) have been advised by the Rosner Law Firm P.A., that a survey of the Property being purchased is recommended because surveys reveal important defects such as boundary disputes, encroachments and other important matters which would not be revealed by the title examination that the attorney has conducted. In addition Buyer has been advised that the title insurance policy obtained when the Property is purchased will not provide coverage for defects that would be revealed by a current survey of the Property.
Disclaimer: This is a publication of Rosner Law Firm P.A. Information provided is intended for general information purposes only, and does not constitute legal advice. For legal issues that arise, the reader should consult with
Thank you for permitting me to assist with your purchase of the above–referenced real property. I look forward to working with you, and will do my best to handle this closing to your satisfaction.
We may be called upon to prepare a deed from the seller. It is assumed that the basic terms of the sale transaction have been agreed upon between the seller and the buyer and that we have no obligation to bargain for either.
Do you want a survey (circle one)? Yes No
If no, please fill out the agreement below.
SURVEY HOLD HARMLESS AGREEMENT
Buyer(s) have been advised that a typical physical survey of a residential lot costs approximately $400.00. Surveys for larger tracts and raw acreage generally are more expensive.
Buyer(s) hereby confirm that Buyer(s) knowingly and voluntarily elected not to order a survey of the Property.
IN WITNESS WHEREOF, Buyer has executed the Acknowledgment of Waiver of Survey as of the ______ day of _________________, 20___.