RE: Sale of Property
Dear Sir/Madam:
Congratulations on selling your home! As you may already know, buyer’s lender has asked our office to represent them at the closing of the above-referenced property. You will be contacted shortly by our office to arrange for the time and place of the closing as soon as we receive the clear to close from the buyer’s lender. However, there are some matters that we will require in order to expedite the transaction and prevent delays or extra costs to you. Thus, it is very important that you note your obligations below and follow the instructions in this letter and/or show this letter to your attorney and your real estate broker. In the event you have any questions, please feel free to contact us at 617-221-9889 or 800-961-8586.
It would be very helpful to have your attorney run the title from the prior owner of your property to the present date to confirm the record of title holders. Your attorney can also obtain a copy of your current deed and inform you of any defects on the title. In order to ensure a timely closing, we would appreciate your completing and signing the enclosed Seller Information/Borrower Authorization Form and returning it to us together with a copy of your mortgage statement as soon as possible either by fax or email. Furthermore, we would like to make you aware of the following information:
I. GOOD AND CLEAR RECORD AND MARKETABLE FREE FROM ENCUMBRANCES
It is the responsibility of our office and/or our agent to conduct a title examination at the appropriate Registry of Deeds in order to determine whether there are any liens or encumbrances on the title. All title encumbrances and liens must either be cleared prior to the closing or paid off from your closing proceeds.
MORTGAGES/TAX LIENS
If your property is presently mortgaged, the mortgage(s) will be paid off at the time of closing using proceeds from the sale, if any. Please complete the enclosed form and return it to us right away in order that we may contact the mortgagee(s) and make the necessary arrangements for payment. This is very important and requires your immediate attention. If you have a home equity line of credit, you must stop using it immediately. After your mortgages have been paid in full, the bank will send us discharges which we will record at the Registry of Deeds. We shall pay each lien from your proceeds of the cash sale. We charge a $100.00 service fee plus a $50.00 express/wire fee for each mortgage or lien that we payoff. If you have an original discharge in your possession, you may bring same at closing to avoid the discharge service fees. However, we request that you fax or email the discharge to our attention in advance for approval.
Sometimes a current problem in real estate sales is the existence of prior outstanding mortgages or missing assignments. We will attempt to prepare the title abstract in advance to notify you of any title problems. There will be a reasonable fee, which will not usually exceed Three Hundred Dollars ($300.00), for each missing assignment and missing discharge if this office agrees to undertake this task. (Provided that the missing instrument is from an institutional lender still in existence and readily accessible.) If the bank from which we receive a payoff statement is not listed at the Registry of Deeds as the record holder of the mortgage, the intervening assignment must be obtained. (We cannot record a discharge of mortgage without a proper chain of title.) Our fee to obtain the intervening assignment will not usually exceed One Hundred Fifty Dollars ($150.00), so long as our office is satisfied that the assignment can be reasonably attained.
If the title is not clear, the Buyer has the right to postpone the closing, as does the lender’s attorney, THEREFORE IT IS VERY IMPORTANT FOR YOU TO RESOLVE ANY OUTSTANDING TITLE ISSUES PRIOR TO CLOSING. Many sellers ask their attorney to prepare a title abstract at the outset to avoid any last minute issues which may arise.
In the event there is a non-institutional mortgage (i.e. one given to a private individual, trust or corporation as opposed to a bank or loan company), we will require that the payoff amount be furnished to us and a discharge that has been signed and notarized prior to closing. We will hold the discharge in escrow until the deed is on record. After recording, we will release the payoff funds to the private mortgage holder and/or his/her agent. UNFORTUNATELY, THERE CAN BE NO EXCEPTION IN THIS REGARD. If you are uncertain about whether an outstanding loan is held by a private lender, please contact our office or have your attorney do so. The obligation to furnish a discharge at closing applies also to outstanding attachments or other liens, if any.
TITLE HELD IN ESTATE
If title is held in estate, and the decedent died less than one year prior to the date of closing, you may have to obtain a license to sell the property from the appropriate court. You will also have to obtain an original death certificate and an original M-792 Massachusetts Estate Tax Lien Release Certificate, or appropriate affidavit and fax the same to our office prior to closing. Please consult the attorney who is conducting the probate of the estate for more detailed information. If the property is Registered Land, the Land Court must also approve the deed prior to closing.
TITLE HELD BY A SURVIVING JOINT TENANT
If a person holds title to the property with another individual who is deceased, you must obtain an original death certificate for the decedent and an original M-792 Massachusetts Estate Tax Lien Release Certificate, or appropriate affidavit. Please consult the attorney who is conducting the probate of the estate for more detailed information.
TITLE HELD BY TRUST
If this property is owned by a trust, our office also requires a trustee’s certificate. This certificate should state that the trust has not been terminated, amended or revoked; that the trustees are the same and they have not resigned; and that so far as may be required by the beneficiaries, they have assented to the transaction. In addition, the statement should be acknowledged before a notary public and be in the form suitable for recording. We can prepare such a certificate at a charge of $75.00 if you request us to do so.
TITLE HELD BY CORPORATION
If you hold title to the property in a corporate name you should immediately take steps to secure the following documents:
1) Certificate of Legal Existence from the Secretary of State;
2) Certificate from the Clerk of the corporation attesting to the adoption of a vote by the Board of Directors, authorizing certain officers to sell the property and to execute the deeds and all related documents therefore;
3) Similar certificate from the Clerk of the corporation attesting to the adoption of a vote by the holders of at least two-thirds (2/3rds) of the voting stock of such corporations, said vote to authorize the sale of the property by certain officers; (see M.G.L. Chapter 156B, Section 75) and
4) a waiver of the corporate excise tax lien imposed by the Commonwealth of Massachusetts Department of Revenue under M.G.L. Chapter 62C, Section 51.
II. DEED
The preparation of a new deed to convey the premises to the buyer is your responsibility. Please fax or email this office a copy of your current deed as soon as possible. Furthermore, you should have your attorney send us a copy of the proposed deed as soon as possible and before the closing date. While we cannot represent buyer’s lender and you, we are sometimes asked to prepare a deed as part of our mortgage services. If you ask us to prepare your deed, there will be a charge to you. Our average cost for this service ranges from $150.00 to $250.00. Please let us know at least three days prior to the closing if we are to prepare the deed.
You must also bring to the closing a new deed signed by you, naming the Buyer(s) as grantee(s). Please have your attorney fax or email a draft of this deed at least 72 hours prior to closing so that we may review it. Please note that all owners of record must sign the deed and all their signatures must be notarized. Under extremely rare circumstances, a deed may be signed under a power of attorney with prior approval from our title insurance company, buyer’s lender and our office. If there is a power of attorney involved, please send our office a copy of the power of attorney document at least three (3) days prior to the closing.
Please further note that if you have a Declaration of Homestead recorded on your title to the property, and you also have a spouse who is not a record title holder to said property, your spouse will be required to join in signing the deed to the buyers, even though they were not on your deed to the property.
III. SMOKE DETECTOR AND CARBON MONOXIDE ALARM COMPLIANCE
We also call your attention to the provisions of Massachusetts General Laws, Chapter 148, Section 26E, Section 26F and Section 26F1/2. You are responsible for having a successful inspection done by your municipality’s fire department of smoke detectors on your property. The fire department will then issue a certificate of compliance. You must bring the original certificate to the closing. Arranging an appointment may take some time, so please plan ahead. The closing cannot take place without it. Please be sure to check with your local jurisdiction or broker to see if a carbon monoxide certificate is also required. Furthermore, 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. 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.
IV. ELECTRICITY, WATER, SEWER, FUEL (NOT APPLICABLE WITH UNITS WITH COMMON METERS)
You must bring a final paid water/sewer bill to the closing. Please contact your municipality to find out how to obtain a final bill. In Boston, and some other localities, a paid bill is not acceptable. The Water and Sewer Department must visit the property and make a final reading. Such a reading can takes approximately three weeks to obtain, so plan ahead. Similarly, if your electricity is provided by a municipal light plant, you must bring with you a final electric reading. Similarly, your fuel oil readings (if your property is not a condominium).
V. CONDOMINIUM UNITS (CERTIFICATE OF COMMON CHARGES & CONDOMINIUM CERTIFICATE OF INSURANCE)
If the transaction involves a condominium unit, you must bring to closing a certificate pursuant to Massachusetts General Laws, Chapter 183A, Section 6(d)certificate from the condominium Trustees stating that there are no unpaid common expenses on your unit. This document must be signed by a majority of the Trustees whose names appear in the Registry of Deeds as Trustees. The Trustees signatures must be notarized, as this document will be recorded at the Registry of Deeds. In certain instances, the seller may also have to obtain a right of first refusal from the Trustees. Please be sure to get these documents to our office 72 hours prior to closing for review.
You will also be required to provide a Certificate of Insurance naming, as insureds, the buyer and buyer’s lender and its successors and assigns as their interest may appear. It is imperative that the foregoing language be on the certificate of insurance. The trustees of the condominium trust can assist you in this matter.
VI. UREA FORMALDEHYDE FOAM INSULATION (UFFI)
You will be required to sign at closing a certificate stating that to the best of your knowledge there is no UFFI on your property. If you suspect that there may be UFFI present, you must have the property tested and notify this office and the Buyer(s) of the results.
VII. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT OF 1980 AS AMENDED
This Federal Law places 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 this transaction. You will be required to execute a copy of the enclosed certification under penalty of perjury at the closing. If you do not plan on attending the closing, please be sure that your attorney or agent delivers the fully completed and executed copy of the affidavit along with the deed. The closing attorney for the firm cannot and will not provide information, advice or opinions regarding the Act’s applicability to you or to this transaction.
VIII. EXPENSES
You will also be required to pay for Massachusetts Excise stamps, recording fees to discharge mortgages and other liens and, where appropriate, to pay these items from the proceeds of the sale.
IX. REGISTERED LAND
If your property is registered land, be certain to bring your Owner’s Duplicate Certificate of Title to the closing. Your property cannot be transferred and papers cannot be recorded without it.
X. CLOSING
You should also be aware that most lenders require 72 hour notice in advance of the day of closing to prepare the loan papers and to obtain the funds. When applicable, there is no exception to this requirement, and it is therefore incumbent upon you to coordinate scheduling of the passing not only with our office but with the buyers and brokers as well.
Upon receipt of the clear to close from buyer’s lender, we will immediately schedule the closing. Please be advised that you MUST bring a government issued photo I.D. to the closing. Furthermore, all record title holders should be present at the closing to execute the necessary documents. In the event that you or another Seller will not be at the closing, you must execute and have notarized a specific power of attorney authorizing the attorney-in-fact to sign any and all documents relating to the sale of the property. Again, even if a Seller is not attending the closing, he or she must sign the deed and have his or her signature notarized. You will also be required to bring all sets of keys for any mailbox (if applicable), and doors, as well as any garage door openers (if applicable) with you to closing.
If you want any additional adjustments (i.e. oil, rent) shown on the settlement statement you must let us know at least three days prior to closing. Also, please provide us with a copy of your latest tax bill as well as the amount of your monthly condominium fee (if applicable), as taxes and condominium fees will be also be adjusted on the settlement statement.
XI. SALE PROCEEDS
If the closing takes place in our office, we will make every attempt to record papers (even electronically where authorized) and disburse funds on the same day. Your proceeds will be issued by check from the Attorney’s Client Funds Trust Account. Your check will be held by our office until the deed is recorded at the appropriate Registry of Deeds. Closings that end by 2:00 P.M. usually record the same day. Closings that end after 2:00 P.M. usually go to record the next business morning. Your funds will not be released to you until the deed and mortgage have been recorded at the appropriate Registry of Deeds and NO EXCEPTION.
However, we can issue your proceeds check to your attorney and/or your broker, so long as they are present at the closing. He or she will have to hold the check in escrow until we notify him or her that the deed is recorded. Otherwise, you may pick up your proceeds at our office after we notify you that the deed is recorded. Alternatively, we can overnight mail your proceeds check to you.
If you need proceeds to be wired to your bank account or you need your proceeds to be in the form of a cashier’s check, you must notify our office at least 48 hours prior to closing with precise instructions. Please note that there is a $50.00 fee for this request. We will try to accommodate your request. However, we cannot guarantee that such arrangements will be made the same day as the closing.
The closing usually takes approximately one hour (60 minutes) or less. You will be asked to sign the settlement statement, a 1099 form, by which we will report the sale to the I.R.S., and various other 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. Please know the name and lender of the Buyer(s) when you call our office so your call can be directed to the appropriate person.
XII. NEW FEDERAL TAX LAWS
Since January 1, 1986 Federal Law requires the closing attorney to report the proceeds of the transaction to the Internal Revenue Service. Consequently, when you complete the attached form, be sure to include your Social Security or Federal Identification Number. PLEASE FOLLOW THESE INSTRUCTIONS VERY CAREFULLY. IT IS YOUR RESPONSIBILITY TO SEE THAT THE ABOVE REQUIREMENTS ARE MET TO AVOID DELAY, INCONVENIENCE AND UNNECESSARY EXPENSES TO YOU. Very truly yours, /s/OneBoston Title & Closing Services, P.C.
