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What You Should Know About the Home Closing Process: An Interview with Susan Brenciforte of Kass Shuler Law Firm

By Susan Brenciforte

Tell us a little bit about your experience, firm's history and the areas of law that you practice.

At Kass Shuler, our commitment to provide innovative legal services has helped us become one of the most reputable business and creditor's right law firms in the State of Florida. Established in 1978, the firm's partners average over 30 years of experience practicing law, most having been with Kass Shuler for more than 20 years. This wealth of knowledge translates into the expertise and service orientation for which we have become known. Our clients have direct access to decision makers when they need it as well as one-on-one guidance from our attorneys.

What's the role of an attorney in home closings in Florida?

Attorneys can assist buyers, sellers and lenders in preparing and reviewing contracts and transfer documents as well as lender financing documents and in preparing and reviewing title insurance commitments and related documents in the chain of title for the property in question.

Attorneys often may be present at closings to respond to legal questions and confirm closing documents have been properly executed, witnessed and acknowledged. If requested an attorney may issue an opinion letter on behalf of their client in favor of one or more parties involved in the closing, but this is not done normally for residential closings. Following closing and return of documents from recording attorneys normally sign title insurance policies issued to new owners and lenders of the property.

Can you list the basic steps in the home closing process?

After a purchase and sale contract is executed between the buyer and seller and the initial escrow deposit is made by the buyer, the buyer's lender (if the transactions is being financed) or the buyer's real estate agent (if the transaction is a cash transaction) will submit the contract and escrow to the attorney's office. The buyer's lender will submit a title request to the attorney's office and the processing will begin. A full title search is ordered and a title commitment is prepared and sent to the appropriate parties.

During this processing stage tax information, a survey, homeowner or condominiums association estoppels letters showing maintenance fees and any assessments, lien searches, inspection reports, and certificates evidencing hazard insurance are ordered and reviewed. After any and all title clouds have been cleared and the parties are ready to close the transaction the attorney's office will proceed to prepare all of the documents pertaining to close the transaction which includes the deed, certificates and closing statement.

As the purchase is being financed, the lender delivers the mortgage financing documents to the attorney's office to be reviewed and then signed at closing. After the closing documents have been approved, a closing date and time will be scheduled for the buyer and seller to execute the documents accordingly. After the closing occurs, the seller, real estate agents, and other parties to the transaction are paid and certain documents are sent to be recorded in the public records in which the property is located and other documents are returned to a lender and the new owners. After documents are returned from recording a title insurance policy or policies are signed and sent to the appropriate parties.

Is there a common misunderstanding that you've noticed potential sellers and buyers have about the process?

Most buyers and sellers do not understand and appreciate the level of detail work associated with a residential closing particularly to satisfy federal (and state) law and regulation and title insurance underwriter requirements. They are unaware of how time intensive the pre-closing and closing process is and incorrectly assume that the information is readily available and the closing documents magically appear at the press of a few buttons. As a result, they often complain about delays and expenses they perceive as unnecessary or expensive or both.

If a lender is involved the process is much more complicated because the lender has to meet separate federally-mandated requirements and also meet their own internal underwriting criteria. The volume of paperwork associated with a loan transaction dwarfs the volume of documents on a cash closing. A change in the loan amount or purchase price or addition or deletion of a buyer has a ripple effect on multiple documents that will likely delay a closing and require much more time and effort on the part of the attorney's office with no additional compensation.

What is something about buying or selling a home in Florida that most people aren't aware of that they should know?

Buyers (and some out?of-state lenders) are often puzzled and frustrated that we require information regarding marital status on transactions where only one spouse is involved in title or in obtaining a loan secured by a mortgage on their primary residence and require joinder by the spouse on mortgages encumbering homestead property. While we can attempt to explain that "homestead" has different meanings depending on the context of the transaction, we often encounter resistance to placing minimal information mandated by statute or title insurance requirements on deeds and mortgages.

Placing the correct information on the document at the beginning normally avoids problems associated with sale or re-financing at a later time. Similarly, when individuals attempt to use entities or trusts to acquire property or finance the purchase of property, they often do not realize that new rules apply imposed by state law and title insurance underwriting guidelines. For example, in Florida title to real property acquired by a trust should be taken in the name of the trustee, as trustee of the trust created by a trust document having a distinct date, rather in the name of the trust alone.

There are also special statutory rules applicable to trustees of "land trusts" if specific language is placed in the vesting deed. These nuances are important to some people for privacy and estate planning reasons but need to be set up properly to be effective. The increasing popularity of limited liability companies to acquire, manage or finance property also must be reviewed for closings because of major changes in the Florida LLC statute that became fully effective on January 1, 2015. The familiar concept of a "managing member" is no longer recognized so LLC organizational documents must be amended to provide for signature authority by a manager or an authorized member or members.

What are one or two things that the seller can do to help make the home closing process easier?

A seller should continue to make their mortgage payments until the closing transaction is completed. A seller should have information readily available for review and consideration prior to the buyer executing the contract; this would help alleviate any surprises and the buyer can make a more informed decision. Particularly useful documents or information include utility bills, insurance, HOA/COA Rules, Covenants and Restrictions, prior survey and or/floor plans, vesting deed and prior title insurance policy.

What are one or two things that the buyer can do to help make the home closing process easier?

Don't make arrangements for the moving company to be active during the closing to move belongings; if the closing is delayed problems with safekeeping furniture and belongings may ensue. Make sure insurance is ready to be placed on the property even if there is an overlap with the seller's policy coverage. Ask questions and request backup information if not provided initially to avoid surprise and unrealistic expectations.

What's the best way for people to reach you and your firm?

Website, email or telephone.

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About The Author

Susan Brenciforte is REO & Specialized Default Operations Manager at Kass Shuler Law...

Phone: 813-229-0900

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