With the housing market picking back up in Georgia, many consumers are going through the mortgage closing process on their first or new home. With such a significant investment and financial decision, it’s important to understand what the many different costs actually represent.
With us today to discuss the role of the closing attorney, and what new homeowners can expect to get for the cost, is Scotty Ball, a partner at Stewart Melvin & Frost. Scotty specializes in residential and commercial real estate law.
Stewart Melvin & Frost is one of Northeast Georgia’s oldest and largest regional law firms and is widely respected as an “Uncommon Practice” – the firm features an experienced team of attorneys, each of whom is recognized as an expert in highly specialized areas of the law.
Question: Let’s start by talking about what the role of the closing attorney is and who the closing attorney represents at the closing?
Scotty: Closing attorneys examine the title to a property and resolve any issues before the close of a mortgage loan. The closing attorney will review and explain all the documents that you will be signing at the closing and make sure they are accurate.
A closing attorney’s primary function is to represent the lender and to oversee the transaction, ensuring that all documents are filled out and filed properly.
Question: When homebuyers close on their homes, part of the closing costs include attorney fees. Why are attorney fees included in this cost?
Scotty: The attorney fee that is listed with the closing costs represents any work an attorney does to complete the sale of the property, including any number of actions, such as:
- Ordering & obtaining a title examination from title examiners
- Reviewing the abstract of the title examination
- Obtaining municipal lien and tax information from the city or town in which the property is located
- Obtaining and reviewing survey/plot plan information about the property
- Obtaining and reviewing mortgage and lien payoff information requested from lenders and others that hold mortgages and liens on the property
- Preparation of the loan documents, including the settlement statement
- Preparation and issuance of title certification (when purchasing only, not when refinancing) – certifying that the buyer has good title to the property and that records have been searched back for the required # of years
- Communication and coordination with borrowers, sellers, real estate agent and lender
- Receipt of the proceeds of the transaction
- Conducting the closing and final evaluation of the title at the “Registry of Deeds”
- Recording documents at the courthouse
- Preparing and delivering proceeds to pay off all outstanding mortgages and liens that affect the property
- Disbursement of the transaction proceeds
- Preparation and issuance of the title insurance policy
- Copying and delivery of the loan documents to the lender and borrower
Question: Should homebuyers hire their own attorneys for the closing process?
Scotty: That’s up to the homebuyer – it is not required for them to have their own personal representatives in the closing process. If they do wish to hire personal representation, the same attorney can operate as both the closing agent for the lender and personal representative for the homebuyer during the closing process, but homebuyers will more than likely incur separate charges.
- Individual services a closing attorney may provide to the homeowners as a “Personal Representative” can include:
- Reviewing the accepted “Offer to Purchase”
- Drafting, negotiating and reviewing the purchase and sale agreements
- Drafting language relative to any contingencies and monitoring included deadlines
- Reviewing HOA or Condominium Association documents
- Answering questions
- Presiding over the closing
Question: Are homebuyers required to hire a closing attorney?
Scotty: Not as a personal representative, but in Georgia, an attorney is required to complete all aspects of the closing. So, ultimately an attorney will have to be involved as part of the closing process.
Question: Does a home buyer have the option of choosing his or her own closing attorney?
Scotty: Some lending institutions today have a list of pre-approved closing attorneys that you can choose from if you ask. You are more likely to be given this option by local community banks as opposed to larger national banks.