If you are about to enter a real estate transaction in Massachusetts and this is the first time you have purchased property in this state, take note that an attorney will be necessary to be present at the closing of the transaction. This is fairly unique to Massachusetts as it is one of the few states in the country to make this a legal obligation. Read on below to find out why Massachusetts requires an attorney to be present at closing and how this can make the purchase of property in the state a safer procedure.
What is a real estate closing?
In Massachusetts, the final step involved in purchasing a property is known as closing. It is also known as the settlement of the transaction in which the ownership of the property passes from one owner (the seller) to another (the buyer).
Real estate closing is a legally binding process, typically taking place at a Registry of Deeds, located at a court house, or at an attorney’s office. The attorney must be present at the closing wherever it takes place and if the buyer is taking out a mortgage to pay for the property, will be an attorney chosen by the buyer’s lender, although the buyer may also wish to hire an attorney of their own to act in their own interests.
At the closing of a transaction, key legal documents will be signed, title documents transferred to the new owner, funds disbursed and the transaction officially recorded.
Is Massachusetts unique in requiring an attorney at closing?
No, it isn’t. Six other states also require an attorney to be present through the closing process. Other states may not have the higher legal protection that Massachusetts and the other six states may have, but they do have ways of ensuring that the transaction takes place as smoothly as possible. Some states have what are called ‘hybrid systems’ in which attorneys are often used at closing, but are not legally necessary. In other states, title companies or settlement agents may be involved in handling the closing process, with attorneys less common.
Whose attorney is it at closing?
Who hires the attorney depends on whether the property is being bought as part of a mortgage agreement with a lender. In this case, it is the lender that appoints the attorney to handle closing, although the legal fees of the attorney are paid by the buyer as part of the mortgage agreement. If the property is bought outright by the buyer without needing a mortgage, then the attorney is hired directly by the buyer. In either case, the closing process must be handled by the attorney under Massachusetts law.
If you are purchasing a property in Massachusetts with a mortgage, you need to be aware that the attorney used by the lender isn’t necessarily there to protect your interests. Although it isn’t a legal necessity, you can still hire your own attorney in addition to the one used by the lender to act in your interests. Your own attorney can check to make sure that the purchase agreement to be signed at closing has been prepared correctly and can explain the mortgage payments to you before you commit yourself to the purchase.
What the attorney does during closing
These are some of the roles of the attorney during the closing process:
- Attorneys will examine the property’s title and ensure it is clear of any issues before it is transferred to the buyer after the purchase has been closed. Title insurance may also be handled by the attorney.
- One of the most important documents during a real estate transaction is the Purchase and Sale Agreement. This is reviewed by the attorney to ensure that it is in the interests of both seller and buyer. The title deed and mortgage agreement are other documents that are also reviewed by the attorney and recorded appropriately according to Massachusetts real estate law.
- An important role of the attorney during closing is to ensure that it is legally sound, transparent and fair to both parties.
- The attorney acts as an intermediary between the parties involved in the transaction, including the lender, seller and buyer, making sure that the transfer of ownership takes place as smoothly as possible.
How Massachusetts requirement for an attorney at closing benefits the buyer
For first time buyers especially, purchasing a property for the first time can be an intimidating and nervous step. Even if this isn’t the first property purchase, the process of purchasing a new property can be fraught with anxieties. The state’s requirement that closing will be handled by an attorney means that these understandable anxieties can be reduced as the attorney will make sure that the process is legal, fair and smoothly handled.
Hiring a real estate attorney in Massachusetts
It is your choice whether to hire a real estate attorney of your own to help with the purchase of a property if you are buying the property with the help of a mortgage. If the transaction is complex or particularly expensive, you are advised strongly to secure an attorney of your own. An experienced real estate attorney will ensure a smooth and legally sound transaction and the legal fees paid will be an investment in your own peace of mind.