For most people, buying a home is the biggest investment they will make during their lifetime. Especially for first time homebuyers, it is a time filled with excitement, anticipation and joy mixed with a little bit of anxiety and worry.
During the process of searching for a home, signing a sales contract, applying for a mortgage and attending the closing, buyers look to real estate professionals to guide them through the process and provide advice about various aspects of buying a home. Even though the closing attorney plays a large role in the real estate closing process, real estate agents, in some cases, are also relied upon by the buyers to help them understand the process.
Therefore, we would like to share five things that we believe every real estate agent should know about closings, titles and title insurance so that they can help their clients make informed decisions about what is best for them.
1. The seller provides the deed – The seller is responsible for providing a new deed at closing, signed and ready to be delivered to the Buyers attorney and recorded once the closing is complete. A seller has the right to retain his own attorney to prepare the deed and review the closing documents, and represent the interests of the seller during the transaction. We find that on some occasions, Sellers choose to allow the Buyers closing attorney to prepare the deed, and if that is the case, the seller should be aware that the closing attorney is representing only the interests of the Buyer.
2. Homestead Declaration – Homeowners can elect to file a Homestead Declaration with the Register of Deeds to protect from $250,000 up to $500,000 of the equity in their home from collection by unsecured creditors. This is not something that is required; however, it is an inexpensive way to protect the equity in your home. Realtors should advise their clients of this option well in advance of the closing so that if they choose to file a declaration, the closing attorney can be informed well in advance of the closing of the buyer's wish to take advantage of this opportunity.
3. Mortgagee Title Insurance Policies do not protect the homeowner – A Mortgagee (or Lender) Title Insurance Policy is designed to protect the mortgage company in the event of a title defect. Most lenders require the buyer to pay for the policy; however, the policy does not provide the homeowner with any protections regarding a defective title.
4. Buyers should purchase an Owner's Title Insurance Policy – An Owner's Title Insurance Policy is optional and not required to purchase a home. However, the insurance coverage is very inexpensive and you only pay a one-time premium for coverage that lasts as long as you own an interest in the home. The policy protects the homeowner from debts and obligations of prior owners as well as protects their use and occupancy of the property.
5. The Expanded Owner Policy – This policy provides the same coverage as the standard policy does but adds an extra layer of protection for the buyer against certain title defects and other property issues. Again, it is rather inexpensive for the coverage and is a wise choice when you consider that you are making a huge investment and you should want to take every precaution to protect that investment.
Experienced real estate agents understand the importance of title insurance and may discuss it at great length with their clients prior to closing. If you have more questions about the closing process, titles or title insurance, do not hesitate to contact our office.
Contact Stephen R. Manning Law Office for more information about our affordable real estate services
When you are searching for a real estate attorney to handle your commercial or residential real estate transaction, you want an attorney with experience in real estate transactions and knowledge of Massachusetts property laws to give you reliable real estate advice.
The Stephen R. Manning Law Office strives to take the stress out of buying or selling commercial and residential real estate by providing support during every step of a real estate transaction. Further, these services are generally provided personally by our attorneys and not paralegals or other support staff.
We serve clients in western Massachusetts, including, but not limited to Springfield, East Longmeadow, Wilbraham, Agawam, Hampden, Longmeadow, Monson, Springfield, Westfield, West Springfield, Wilbraham, Sturbridge, Worcester and communities on Cape Cod, including Barnstable, Chatham, Dennis, Orleans and Yarmouth. Our office is conveniently located at 200 North Main Street, Suite 2, East Longmeadow, Massachusetts 01028. Call us today at (413) 525-1119 so we can help you with your real estate needs.