As we approach the closing date, both buyer and seller are anxious to close. Over time, we have created a checklist of items/issues that we must resolve prior to closing. If they are not, it can create headaches at closing that no one wants to deal with!
When representing a seller, we make sure to check off the following items prior to the date of closing:
- PAYOFF LETTER. Is there an existing mortgage on the property? If so, the seller must obtain a payoff letter. The amount of the payoff must be good past the date of closing. If it is only good through the date of closing, a few days of interest will have to be added to the payoff amount to make sure Seller is covered through the date that the lender receives the payoff. If Seller is an estate, does the lender need to be notified prior to closing that the mortgagor is deceased? These are all issues that need to be managed and resolved prior to closing.
- JUDGMENTS. Did the title search reveal judgment(s) against the Seller that must be resolved prior to closing? If so, Seller must obtain a payoff letter prior to closing and the judgment must be paid at closing.
- VIOLATIONS. Did the title search reveal violations on the property? If so, what are Seller’s obligations pursuant to the contract of sale? If the violations must be cleared by Seller, efforts must be made prior to closing to clear them. Whether it is an open permit that has to be closed, a certificate of occupancy that must be obtained, or a fee that must be paid, we have to make sure these issues are rectified prior to closing.
- OPEN TAXES. Have the taxes been paid by Seller? When we are closing shortly before the end of a fiscal year for school taxes, or town/county taxes, Seller may choose not to pay the taxes and adjust for them at closing. Therefore, if there are open school taxes, for example, we will work with the title company and buyer’s attorney to obtain the exact amount due and owing and adjust accordingly so that the appropriate party receives the credit at closing.
- CONDOMINIUM REQUIREMENTS. If the property being sold is a condominium, we will start working early on in the transaction with the condo board to figure out what the particular procedures are for selling the unit there. There are most likely fees that have to be paid by both buyer and seller in order for the condominium to issue a waiver of the right of first refusal. We must make sure that all of the appropriate fees are paid prior to closing, by both buyer and seller.
Having a checklist for items that we must deal with prior to closing helps us keep track of each transaction. Of course, nothing is perfect and there are frequently issues that arise that we learn from, but every time we learn something, we add it to our check list, if necessary, and continue to track each item to make our transactions are as smooth as possible for everyone involved.
Disclaimer: The information contained in this post is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and communications. Contacting us, however, does not create an attorney-client relationship.