Closing Attorneys: What Are They And What Do They Do?

Closing a real estate deal can be an exhilarating experience. After finding the right property and completing numerous steps like inspection and appraisal, the closing represents the fruits of considerable labor. While exciting, it’s also a complicated process. A closing attorney can help make sure the intricacies of this process come together smoothly to ensure the sale is finalized.

What Is A Closing Attorney, Or Lawyer, In Real Estate?

A closing attorney is responsible for organizing and overseeing the closing of a real estate transaction, as well as preparing the necessary paperwork and contracts. In some states, it’s mandatory for a closing attorney to be present during a closing.

A buyer, a seller and a lender can each have a closing attorney representing them at closing. Closing attorneys can go by many names, like escrow agent, settlement agent and real estate attorney. Regardless of the title, all of these terms refer to professionals that perform the same functions.

What Does A Closing Attorney Do?

As previously mentioned, the closing attorney organizes a number of moving parts and necessary tasks to get the deal closed. Let’s take a look at the specifics.

Prepare Closing Documents

A seller’s attorney is responsible for drafting up the initial contract for the home sale. During this process, the buyer’s attorney can add additional terms to the contract as part of the negotiation. These become the foundational pieces of information for creating the various closing documents.

Conduct A Title Search

A closing attorney performs a title search to look for liens, easements or other issues with the property across its chain of title. This ensures the new owners can purchase the property without it being encumbered by things that may have happened in the past.

Obtain Title Insurance

A closing attorney presents their opinion of the title to the title company to obtain title insurance for the buyer. This is an assessment of whether or not the title is “free and clear” or has some issues that need to be sorted out before the sale is finalized.

Gather Information

Part of being a closing attorney means taking on the responsibility for gathering information on any or all of the following items:

• Homeowners insurance policies
• Homeowners association (HOA) dues
• Home inspection reports
• Home warranty information

Coordinate The Closing Date

Communicating with all the parties involved in the real estate transaction is a critical function of the closing attorney. This consists of coordinating and organizing the closing date, time and location, including communicating to all parties what funds to prepare for closing day. If you are unable to meet in person, scheduling an eClosing is also an option.

Review Closing Documents

Real estate documents are full of legal language that can often be confusing. To help with this, the closing attorney reviews and explains the final closing documents to the buyer and seller before they’re signed.

Distribute Funds

Making sure everyone gets the money coming to them at the end of a sale is obviously very critical. The closing attorney is responsible for disbursing the funds to the correct parties.

Benefits Of Having A Closing Attorney Present

Now that you know a little bit about what they do, let’s take a look at some of the key benefits of having a closing attorney present at the closing.

• A closing attorney can help clarify guidelines and terms present in a purchase agreement.
• Closing attorneys can help guide their client through the various legal terms and jargon.
• A closing attorney will be more adept at conducting title searches and preparing closing documents.
• Your closing attorney may catch errors or issues in documents that you wouldn’t.
• An experienced closing attorney will be able to help negotiate new terms if necessary.

It’s also important to note that sellers doing a “for sale by owner” (FSBO) should strongly consider hiring a closing attorney to ensure any legal issues that could affect the sale are identified and remedied.

What Does A Closing Attorney Cost?

Closing attorney fees depend on the services provided, whether you or the lender hired the attorney and who the contract stipulates is responsible for the closing costs. A typical closing attorney will charge, whether it is done per hour or a fixed rate, between $500 and $1,500 total to conduct a home closing.

The Bottom Line

Closing attorneys can be a huge asset to ensure a closing runs smoothly, and it’s a great idea to have one present even if it is not required by law in the state you’re selling or purchasing real estate in. Staying informed about all the various roles and processes that a home sale entails is critical, so be sure to read more home selling tips in the Rocket Homes℠ Home Seller’s Guide.