REAL ESTATE 101:
The Closing
William “Chip” Mackrides
MACKRIDES ASSOCIATES
and
David J. Scaggs
THE GRANGER FIRM
Preparation for Closing
The Seller’s Disclosure (68 Pa.C.S.A. § 7301)
BUYER: Make sure that your client reads it and asks
questions where it raises concerns and issues.
Check to make sure there is nothing left blank.
SELLER: Make sure that it is provided...over-disclose!
The Seller shall be liable in the amount of actual
damages suffered by the Buyer as a result of a
violation of this Law as long as the action is
commenced within two years after the date of
final settlement.
Preparation for Closing
The Agreement of Sale : Review it!
▪ Know it upside down and sideways: be familiar with the
terms, special clauses, addendums, inspection clauses
and endorsements.
▪ Make sure that all preconditions and contingencies have
been met (ie. Inspection related work, Use & Occupancy
inspections & Certifications).
▪ Follow the Money: Check the deposits, consideration &
mortgage commitment...make sure it is all there.
▪ Check all of the time limits...they count!
Preparation for Closing
▪Make sure that someone has ordered the loan payoff information
and the tax certifications.
▪If an Estate is involved, do you need an Order of Court to sell the
Property, do beneficiaries have to be at closing to sign.
▪Title searches: review abstract of Title, check Judgments and
conditions. Obtain copies of and read the exceptions listed on the
commitment!
▪Mortgage Commitment: review conditions and requirements,
make sure that Mortgagee will have documents ready for closing.
Preparation for Closing
▪ Make sure your Buyer client has Homeowners
insurance and a paid premium receipt.
▪ Who has the Deposit Money, interest?
▪ Notice of settlement: Make sure you know where and
when Closing will take place, advise your Clients
accordingly and tell them to bring identification and a
checkbook, as well as a Cashier's check, unexpired
warranties and keys, etc...
Preparation for Closing
▪ Condominiums: 68 Pa. C.S.§3407 Certificate requirements
(Agreement of Sale is voidable by the purchaser until the latter of Five
(5) days after the certificate has been provided or until closing)
▪ Planned Community: 68 Pa. C.S.§5407 Certificate requirements
(Agreement of Sale is voidable by the purchaser until the latter of Five
(5) days after the certificate has been provided or until closing)
▪ Cooperatives: 68 Pa. C.S.§4409 Certificate requirements
(Agreement of Sale is voidable by the purchaser until the latter of Five
(5) days after the certificate has been provided or until closing)
Presettlement Inspection
▪ Have a Plan with your Buyer or Seller in the event that there are issues
uncovered during the inspection. Be available prior to Closing to speak with
your client; have contact information for the opposing counsel or realtor.
▪ Be aware of Seller’s and Buyer’s respective responsibilities (ie. Fixture
issues, Undisclosed defects or new damage vs. Normal wear & tear).
▪ Escrow Agreements: have an Escrow Agt. with you or know how to
prepare one, provide for fees, indemnification and interpleader ("An
equitable action brought by an escrow holder to have a court determine the
ownership rights of adverse claimants to the money or property that is held
by that escrow holder").
Closing/Settlement
▪ Have there been any new Assessments to the property, any
casualty losses or payments, condemnations/takings, adverse
possession or presciptive easement claims, mechanics liens, lis
pendens, lawsuits, bankruptcies?
▪ Occupancy of Property prior to or after closing: inspect,
indemnification/hold harmless Agreement.
▪ Contract contingencies: ie. conditions of house or property,
existence of Tenants, water, sewer or environmental tests,
subdivision, zoning, financing...
▪ Survey: not customarily required, but could be issues of property
lines or infringements.
Closing/Settlement
▪ Mortgage Documents: review them.
▪ Mortgage requirements and commitment: can your
Buyer satisfy them/ are there issues involving Seller
assist that might not be acceptable to Mortgagee.
▪ Mortgage satisfactions, make sure they are received
and recorded (your client would be wise to pay you to
follow up on this to make sure it is actually done).
Closing/Settlement
▪ Title: Who is insured? the Mortgagee?, the owner?, both?
▸ make sure all conditions for closing are removed and there are
no unacceptable exceptions
▸ have the title abstract "marked up" for the Buyer to remove title
exceptions and mark the deed and mortgage as “insured”.
▸ Examine the HUD-1(make sure it has all relevant information
about the Title Company that you'll need in the event of a claim
years down the road)
– check the figures, software may not be faulty but input could
check the charges, don't be afraid to ask, compare to estimate of
closing costs if prepared by title agent
– make sure that Payoff of seller’s mortgage(s) is evidenced
Closing/Settlement
▪ Check the Endorsements, who and what are they for?, are
they necessary/required? see Tirbop's (Title Insurance Rating
Bureau of PA) website for a complete listing of Pennsylvania
Approved Endorsements http://www.patitleratingbureau.org/about-tirbop/tirbop-ratemanual
▪ Deed: check the property description, the names (how are
they taking title? ie. Joint tenancy, Tenants by the Entirety,
Tenancy in Common), the recital, and the warranty of
title...Does it tell the right story!
Real Estate 101
▪ IN CLOSING: Be
careful out there!
THANK YOU FOR YOUR ATTENTION