Buying

In Western Massachusetts, generally there is only one Attorney on the home buyers’ side.  This is the lender’s attorney.  The lender’s attorney is paid for by the buyer, but represents the interests of the lender.  Therefore, it is not the responsibility of lender’s counsel to advise you on your rights and obligations regarding your new home purchase.  A buyer has two options.  Either they can hire the lenders attorney to also represent their interests.  This is the typical situation in this part of the state.  This is because both the lender and the buyer typically have the same wants and needs during the closing.  The second option available to a buyer is to retain their own attorney to represent your interests in this process.

What you should know about your closing.

1.    INSURANCE. Your insurance agent MUST fax or deliver to our office a copy of a binder for homeowner fire and extended coverage insurance along with a receipt showing that the first year’s premium is paid in full, at least three (3) business days prior to closing. The insurance policy or binder must name all of the persons who will hold title to the property. The mortgage clause adding the mortgagee’s insurable interest to all policies MUST BE WORDED in accordance with the instructions listed in your commitment letter issued by your Lender.

2. FLOOD INSURANCE. If the premises is located within a specially designated federal flood hazard area then flood insurance is a mandatory requirement and you must provide a flood insurance policy together with a paid receipt for the full first year’s premium at or before the closing.

2.    TITLE INSURANCE. The lender requires that they be provided with a lender’s title insurance policy (loan policy) to protect their interest in your property up to the amount of the mortgage. While the premium for the loan policy is included in your closing costs, it does not protect you. Your ownership interests are insured only by an owner’s title insurance policy (owner’s policy). While the lender’s coverage under the loan policy decreases as the mortgage is paid down and terminates when the final payment is made, your owner’s policy remains in effect for as long as you and your heirs own the property. The owner’s policy is available for a one-time premium and at a discounted rate if purchased simultaneously with the loan policy at the time of closing.

The owner’s policy provides coverage for numerous matters which are not covered by the standard attorney’s certification of record title and which are not discoverable by searching the land records. Typical examples of such matters include forged documents, the incapacity of a grantor, undisclosed or missing heirs, missing signatures, mistakes in recording, unknown creditors and problems involving access to the land. The best owner’s policy now available is known as the Eagle policy, which provides additional protection for problems such as zoning and building permit violations, restrictive covenant violations, encroachments and defects in title. Because we believe that obtaining an expanded Owners Title Insurance Policy is in your best interest we will plan to issue same and include the additional premium cost in the settlement figure you will bring to closing unless you advise us to the contrary.

7. MANNER IN WHICH TITLE WILL BE HELD. Please see our page on the ways to hold title in Massachusetts.  Please advise our office on how you would like to take title to your new home. This information should be provided to us as quickly as possible since many documents which we prepare require this knowledge.

8. OUR CERTIFICATION OF TITLE. We are required to certify to you that the title to the premises meets the standards established by law. Our certification to you should not be construed as establishing an attorney/client relationship between you and our office. The services we render are only on behalf of the mortgage lender unless other arrangements are made with our office.

9. SMOKE AND CARBON MONOXIDE DETECTOR COMPLIANCE. You should contact the sellers and insure that they have obtained, and will bring with them, a current certification from the city or town fire department relative to the installation of smoke and carbon monoxide detectors. You may be required to execute a certification at the closing that you have inspected the installation of the smoke and carbon monoxide detectors and are satisfied as to compliance with this law.

10. WATER, SEWER AND ELECTRICITY. You should ask the sellers to obtain a final reading of the water meter so that all outstanding water and sewer bills may be taken care of at the closing. If electricity is provided by a municipal light plant, the sellers should obtain a final electric reading.

11. HOMESTEAD DECLARATION. Our office can prepare a Homestead Declaration for you for this transaction if the home you are purchasing will be your primary residence. Under Massachusetts Law an owner of a home who intends to occupy it as their principal residence can protect a portion of the equity in their home by merely filing a Declaration of Homestead in the Registry of Deeds where the property is located. We believe that a Homestead is in your best interest and we will prepare and record this Declaration for you unless you advise us to the contrary.

Refinancing your home.

Homeowners refinance for a number of reasons.  Most notably, to obtain a lower interest rate,  reduce monthly payments, change the term of the loan, get cash out, or change the loan type.  When you refinance your home, the process follows many of the same steps as purchasing a home.  We can manage your loan from application right through closing day.  If you are thinking of refinancing, an attorney is just as important as when you purchased your home.  Do not let the popularity of refinancing make you believe that it is a standard process.  Having an experienced real estate attorney is key to protecting your home.