RE: Purchase of Property
Congratulations on the purchase of your new home! We are pleased to inform you that our office has been selected by your lender to conduct the Closing for your property. We have commenced an examination of the title, ordered a Certificate of Municipal Liens from the Collector of Taxes and, if required, ordered a mortgage plot plan for your lender’s records.
When the above items are completed and reviewed by our staff, and upon receipt of the clear to close from your lender, we will contact you to arrange for the time and place of the closing. Our office will also confirm the amount of money (if any) you will need to bring to the closing. It is our goal to make sure this important transaction goes smoothly for you. Please share this letter with your attorney/your real estate broker, or feel free to contact us at 617-221-9889 or 800-961-8685 with any questions.
We strongly suggest that you review your lender’s commitment letter carefully. If any special conditions are required, they must be met PRIOR to closing to the satisfaction of your lender. Furthermore, I would appreciate your reviewing the enclosed instructions and forms carefully with respect to other requirements that must be prior to closing and responding to each item applicable to you.
PLEASE REVIEW ALL SECTIONS BELOW SO THAT YOU ARE PREPARED FOR YOUR CLOSING.
l. Closing Funds: We will inform you the day prior to your closing the amount of funds that you need. Unfortunately, we do not know the amount of your closing costs until we receive the closing package from your lender. PLEASE NOTE all closing funds must be in the form of a cashier’s or bank check, drawn on a Boston area bank and made payable to OneBoston Title & Closing Services, P.C. At closing, you must also bring a personal check for any adjustments (oil, water) that may need to be made. If we are unable to tell you the exact figure that you need in sufficient time for you to arrange your finances, you should estimate as follows:
1. Sale Price of the Property
(-) minus $ Deposit Paid
(-) minus $ Mortgage Amount
(-) minus $ Seller’s paid closing costs
(+)plus $ Closing Costs (See your good faith estimate of settlement charges or ask
your lender for an estimate of total closing costs.)
(=) equals Amount to Bring to Closing in a Bank Check
We will accept a personal check for any balance due which is less than $500.00. If you are short more than $500.00, we will ask you to go to your bank for the difference. Any overpayment will be refunded to you by a check from OneBoston Title & Closing Services, P.C. Real Estate Conveyancing Account.
2. Hazard Insurance: If you are buying a single-family or multi-family house, you are responsible for bringing an original hazard insurance binder with a paid receipt showing that you have paid the current year’s premium, even if your lender is escrowing homeowner’s insurance payments. The policy or binder for such insurance must be in an amount at least equal to the total of all outstanding mortgages on the property or 100% of the replacement cost of all insurable buildings and other improvements on the land, whichever is less. IF YOU ARE GOING TO RELY ON THE 100% REPLACEMENT COST AMOUNT AS SUFFICIENT INSURANCE, THEN THE POLICY OR BINDER MUST STATE THAT 100% REPLACEMENT COST IS IN EFFECT. Further, the insurance policy or binder must name all of the persons who will hold title to the property and must name your Lender as loss payee ISAOA/ATIMA. Please refer to your commitment letter for the Lender’s further instructions, name and address, as it should appear on the insurance binder.
Please call us and provide us with the name and telephone number of your insurance agent. A copy of the binder must be faxed/emailed to us prior for review at least 72 hours prior to the closing date.
3. Condominium Insurance: If you are buying a condominium unit, your Lender will need to be named on the Condominium Certificate of Insurance as the loss payee for your unit. Usually the listing real-estate broker will obtain this certificate from the condominium Management Company or Condominium Trustees. Please check with the listing real estate broker to make sure this is done prior to the closing or whether you need to contact the management company or the Condominium Trustees. Again, a copy of the binder must be faxed to us for review at least 72 hours prior to the closing date.
Furthermore, a 6(D) certificate stating that there are no unpaid common charges to the condominium association as of the date of closing must be produce at that time. This certificate is obtained from the trustees or managers of the condominium and must be in the form prescribed by law. You should be sure to ask the seller to produce such a document to us for review at least 72 hours prior to the closing date.
4. Flood Insurance: If the property is located within a specially designated federal (HUD) flood hazard area (Zone A) then flood insurance is a mandatory requirement and you must provide a flood insurance policy application together with a paid receipt for the full first year’s premium at or before the closing. Please note that if the property is located within zone B, flood insurance is not required although it is highly recommended.
5. Rent Loss Insurance: If this transaction involves a loan on investment premises then rent loss insurance may be required and an appropriate binder to that effect will be required at or prior to closing. You should check with the Bank for applicability of rent loss insurance to you.
6. Title Insurance: Your lender will require you to purchase Lender’s Title Insurance. The cost of Lender’s Title Insurance is $2.50 per thousand dollars of the loan amount, rounded up to the next thousand dollars. Lender’s Title Insurance protects only the Lender’s interest and remains in force until you pay off the loan. Therefore, if you ever refinance your loan, you will have to purchase Lender’s Title Insurance for the new loan amount. Most buyers also purchase Owner’s Title Insurance. Please ask your attorney about Owner’s Title Insurance, or call, and we will be happy to discuss this with you prior to the closing. Also, see the enclosed statement on Owner’s Title Insurance.
In order to purchase Owner’s Title Insurance, you pay a one-time fee at the closing. Owner’s Title Insurance covers your property for as long as you own it. It is separate from Lender’s Title Insurance. Once you purchase Owner’s Title Insurance you do not need to purchase it again in the event you refinance your loan.
The cost of simultaneously issued Owner’s and Lender’s Policies is $3.65 per thousand dollars of purchase price rounded up to the next thousand dollars, plus $175.00.
7. Manner in which Title will be held: Enclosed you will find enclosed an explanation of some options for how to hold title to real estate. Please fill out and return the enclosed form indicating how you would like to take title to the property. This information should be provided to us as quickly as possible since many documents which we prepare require this knowledge. Failure to provide this information in a timely fashion could delay your closing.
8. Certificate of Title: The following matters apply only if the transaction involves a purchase of real estate with a dwelling designed to be occupied by not more than four families to be occupied in whole or in part by one or more of you. Please find an attachment to this letter relative to the examination of title and our certification pursuant to M.G.L, c. 93, §70. We are required to certify to you that the title to the premises meets the stated standard. However, you should not construed said certification as establishing an attorney-client relationship between you and our office. The services we render are only on behalf of the mortgage lender, and we cannot advise or counsel you relative to the transaction. If you wish to obtain legal advice regarding the quality of the title or with regard to some other aspect of the transaction, you should retain independent counsel.
9. Smoke Detector and Carbon Monoxide Alarm Compliance: We call your attention to the provisions of Massachusetts General Laws, Chapter 148, § 26E, § 26F and § 26F1/2, a copy of which is enclosed herewith. You may be required to execute a certification at the closing that you have inspected the installation of the smoke detectors and carbon monoxide alarms and are satisfied as to compliance with this law. You should contact the sellers and insure that they have obtained, and bring with them, a current certification from the city or town fire department relative to the installation of smoke detectors. The foregoing may not apply in certain commercial transactions. If you are unsure of the applicability of this law, please check with your counsel or contact our office. You should be sure to ask the seller to produce such a document to us for review at least 72 hours prior to the closing date.
10. Foreign Investment in Real Property Tax Act of 1980, as amended: We also call to your attention the Foreign Investment in Real Property Tax Act of 1980 as amended. The provisions of this law place special requirements for tax reporting and withholding on the parties to a real estate transaction under certain circumstances as set forth in the Law. You should seek the advice of your attorney or accountant concerning the effect of this Act on you and this transaction. The closing attorney for this firm cannot and will not provide you with information, advice or opinions regarding the Act and its impact on the transaction. Enclosed is a copy of the certification which you and the seller will be required to sign at closing.
11. Water, Sewer, and Electricity: You should ask the sellers to obtain a final reading of the water meter so that all outstanding water and sewer bills may be taken care of at the closing. If you are purchasing a condominium unit, it is likely that water and sewer charges are included in the monthly condominium fee. In that case, a final water and sewer bill is not required. If electricity is provided by a municipal light plant, the sellers should obtain a final electric reading. You should be sure to ask the seller to produce such a document to us for review at least 72 hours prior to the closing date.
12. Walk Through: Please make sure that you conduct a walk-through of the premises to insure that the Seller is delivering the property in the condition required under your Purchase and Sale Agreement. Please try to resolve any issues prior to coming to the closing.
13. Homestead: This office will prepare a Declaration of Homestead for further protection of your property if it will be your principal residence. Once this Declaration of Homestead is on record, in most circumstances, it protects up to $500,000.00 of equity (over and above your mortgage amount) that you may have in the property from creditors. Our fee for preparing this document is $100.00. You must also pay the recording fees of the Registry of Deeds: $35.00.
14. Photo Identification: Please bring a government issued picture I.D. with you to the closing.
The Sellers, or their attorney and/or broker will bring among other things, the original deed and the keys to the closing together with smoke detector certification, final water and sewer bill (if applicable), oil reading (if applicable), and certificate of paid condominium charges (a 6(d) Certificate, if applicable), as discussed above.
The closing itself usually takes 30 to 60 minutes. You will be asked to sign, among other things, a settlement statement, promissory note, mortgage and various other bank documents. If you have any special scheduling requests such as back-to-back closings or time restraints, please let us know as soon as possible, so that we can schedule your closing accordingly. Also, our office is child and infant friendly.
We look forward to not only working with you but to your satisfaction. If you have any questions that your paralegal cannot answer, please feel free to contact us directly anytime.
Very truly yours,
OneBoston Title & Closing Services, P.C.