Prior to Closing
Buying Boston Area Real Estate
Get Home Insurance - Several weeks before your closing you should get in touch with your insurance company to let them know that you are purchasing a home. They will prepare an insurance binder which can be sent to you or to the office of the closing attorney. This is done so that when you leave the closing your property will be fully and immediately covered. The policy is required by your lender, since your home will be collateral for the loan. Most standard policies will pay to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disasters that are listed on the policy. They will not ordinarily pay for flood or earthquake damage. If you want or need this coverage it is sometimes available at an additional cost depending on what part of the country you are buying in. A typical policy will also cover detached structures such as tool sheds, gazebos, or a detached garage.
Don’t forget liability coverage. This is coverage to protect you against lawsuits in the event someone is injured on your property. There is usually also a provision that will cover an event in which you, your children or pets accidentally ruin property belonging to a neighbor. Experts advise that you purchase at least $300,000 worth of liability protection.
Talk To Your Attorney about the best way to take title. There are several possibilities: Fee Simple, Tenants in Common, Joint Tenants with Right of Survivorship, Tenancy by the Entirety. Married couples traditionally take title under “tenancy by the entirety.” This arrangement is, actually, limited to married couples and includes an automatic right to survivorship.
You also need to talk to your attorney about Title Insurance. You are required to have Lender’s Title Insurance, and Owner’s Title Insurance is also an option. If you do not have a Buyer’s Attorney then talk to the closing attorney.
Some buyers elect to purchase Owner’s Title Insurance and some decide against it. Generally speaking, it’s a good insurance to have. You don't want problems from prior ownerships to interfere with your rights to your property. And you don't want to pay the potentially ruinous cost of defending your property rights in court. A title insurance policy is your best protection against potential title defects, which can remain hidden despite the most thorough search of public records and the most careful escrow or closing.
You also want to talk to your attorney about filing a Declaration of Homestead which allows a family to protect up to $500,000 of the value of their primary residence.
Review the HUD-1 - The closing attorney should call you with final figures and fax a copy of the Settlement Statement (HUD-1) in advance of closing. Your attorney should review these items with you before getting to the closing table. You can get a good summary of what belongs on each line of the HUD-1.
The HUD-1 will summarize all of the financial credits and debits of the closing. It will tell you how much money you must bring to the closing table. This figure should come in the form of a certified bank check made out to yourself that you will endorse over to the conveyance (closing) attorney at the closing table.
The Final Walk-Through - Most buyers choose to request and perform a final walk-through just before closing to review the property's condition. Based on what they saw from their visual inspection during a showing, supplemented by the information in the home inspection report, their goal is to determine if the property is in the condition they expected it to be. The final walk-through is also the time to determine the status of any agreed-upon repairs or modifications. Depending upon the nature of the repairs, it may be necessary to ask the home inspector to attend the final walk-through. Most Purchase and Sale Agreements require the property to be "broom clean" and all trash and residue removed from the premises. Call ahead to your attorney to let her or him know about any problems at the walk-through.
Where is the Closing? The P&S Agreement typically spells out when and where the closing will be. However, sometimes the closing attorney changes it. The default is the Registry of Deeds in the area the property is located. Coordinate with your Buyer’s Agent for confirmation and directions to the closing. next topic »
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