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Home Closing Preparation: An Interview with Cris Offenberg of Silva, Thomas, Martland, & Offenberg, Ltd.

By Cris Offenberg

Tell us a little bit about your company and its foundation.

Silva, Thomas, Martland and Offenberg is located in Middletown RI and we handle a variety of legal matters. We want our clients to come to us for all of their legal representation. As a full service law firm, we represent clients in a range of practice areas, including business and commercial law, administrative law, personal injury, family law, probate, elder law, education law, and criminal defense, and specifically in:

  • Land Use and Zoning: As land use law attorneys, we possess extensive experience and knowledge in the area of land use and zoning. With contacts at every level of the process, we are able to prepare our clients for every possible outcome.
  • Real Estate: As real estate lawyers, we represent businesses and individuals in commercial and residential closings and other real estate matters; refinancing, selling and landlord/tenant matters.
  • Estate Planning: As estate planning lawyers, we understand the importance of protecting your assets. We assist with all estate planning issue, including wills, trust, powers of attorney, living wills, and living trusts and then the probate and estate administration after death.

Our attorneys practice in practice in Probate Court, District Court, Family Court and Superior Court.

What is your company's mission?

We believe that clients are best served by attorneys who know them beyond a mere business relationship. Our commitment to personal service, quality legal representation, trust, and respect is the foundation of our long-standing relationships with the community.

What are some of the services your company provides?

From a real estate perspective: we provide the review of Purchase and Sales Agreement; title search, preparation of title commitment for lender and buyer; issuance of title policy; we are the hub for the closing, staying in communication with client/buyer; the realtors, attorney for seller, and the lender and loan officer. We coordinate the closing date and time to make it stress free and seamless for all involved. When necessary we handle any disputes that arise and will work with parties to effectuate a resolution prior to closing.

Please explain the general process of closing a home sale.

The process generally starts once you find the house of your dreams; the buyer puts forth an offer to purchase with the terms of the agreement including the most basic: purchase price, deposit funds, closing date, mortgage and/or inspection contingencies; title search contingency; and any other required terms; Seller then reviews this offer and accepts or counteroffers; once terms are agreed upon between the parties then the Purchase and Sales Agreement is executed by all parties.

Next step is satisfying any contingencies in the contract; Buyer generally hires a home inspection to conduct inspections within 10 days of signing the contract. Buyer also makes a formal application with a lender/bank for their loan when there is a mortgage contingency. If the home inspection reveals as matters that buyer wants to resolve the negotiations take place or the Buyer can terminate the contract. Buyer can request for Seller to fix items before closing. The lender/bank will order an appraisal of the property to determine its fair market value for purposes of lender/bank approving the requested loan amount.

Once inspections and mortgage contingency have been satisfied then Buyer will seek a policy of home insurance to be in place as of the date of closing and provide their lender/bank with any and all requested financial documentation to approve their loan. All the while, the closing attorney is conducting a title examination of the property in land evidence records of the city/town where property is located. The attorney is seeking any items of record that may need to be paid at the closing, common payoffs include city taxes, water bills, fire district taxes, sellers mortgage, sewer assessments. Also title examination is checking to make sure seller has full legal ownership of property and that no outstanding lien releases are missing or judgments or the like have been recorded against the owner. The Seller is going to be conveying a Warranty Deed to buyer at the closing and title attorney is going to be issuing a Title Insurance Policy to the lender/bank and the buyer so they need to be certain all is clear on title or collect any outstanding monies due and pay at the closing table from the sellers proceeds. The closing attorney provides a commitment for title to the lender/bank as part of their process to issue a "clear to close" to all parties. Lender will issue a clear to close when inspections completed, appraisal completed and property valued at or over purchase price, and title commitment issue, plus any and all documents lender/bank needs from buyer.

Once the Clear to Close is issued then the closing attorney can arrange for a date and time for the actual closing. All the parties- sellers, seller attorney, buyer and realtors, and often the loan officer of lender/bank, attend the closing. The seller signs a Warranty Deed to the Buyers and the parties sign a document known as the HUD-1 Settlement Statement that is prepared by closing attorney and outlines on sellers side- the gross purchase price plus any credits due seller- minus all the expenses of sale (including paying off any items found during title search), with a net amount due to sellers. The buyers side has the gross purchase price plus any other expenses of purchasing the property and minus from that amounts already paid (for example deposit funds) or paid by others (for example the loan amount) for a net sum due by buyers at the closing.

Once all the transfer documents are signed, and buyer signs loan documentation, the closing attorney has the Warranty Deed and Mortgage of buyers recorded in land evidence records- but only after updating the title search to make sure it is still clear from date they conducted search in first place up to the moment the Deed is recorded (this ensures seller has not put an new liens or judgments on record). Seller is issued their net sum check after recording. Buyers are mailed the original recorded Warranty Deed and their Title Insurance Policy after recording.

What is the realtors role along this process?

The Realtor assists the buyers in finding a perfect home. If Realtor is representing the Seller they are involved in the process of setting the listing price and advertising and marketing the property to prospective buyers. Once a Purchase and Sales Agreement has been signed the Realtors are involved in arranging the home inspection, appraisal and any other showings during the time between signing and closing. As well, they obtain a final Smoke Detector and Carbon Monoxide Detector Certificate from local fire department (required by RI Law to have at closing) and final water, sewer, fire district tax bills for the closing attorney. They also arrange the final walkthrough of the property usually same day or night before the closing. This is the Buyers last opportunity to view the property to ensure it is in same condition (except normal wear and tear) as the date the contract was signed as when they accept the Warranty Deed the terms of the Purchase and Sales are merged into the deed.

How long can this process take?

Generally speaking the time from signing the Purchase and Sales agreement to closing is about 30 days. Depending on the time frames of the inspections and appraisal it could be little longer. The closing attorney and loan officer and realtors make efforts to close on the date that is in the Purchase and Sales Agreement so parties should select a date to put into the agreement that is realistic and available for all parties.

How does this process differ, requirement wise, for the buyer or the seller?

The Seller is required to provide to Buyer a Warranty Deed at closing with insurable and marketable title to the property and the property shall be in the same condition at closing as when the contract was signed. Seller will need to provide any and all documentation needed for closing attorney to obtain an payoffs on liens or judgments of record or to obtain releases of items paid but still remaining on record. Seller has obligation to provide a smoke certificate, final water bill, final sewer, or fire district tax bills. Seller's attorney generally drafts the Warranty Deed and a Seller's Residency Affidavit. If a seller is a non resident of RI their potential capital gains on this property will need to be collected at the closing table. Seller has two choices of meeting this requirement. First, they can do nothing prior to closing and the closing attorney will withhold 6% of the net proceeds of their funds as shown on the HUD-1 closing statement and remit that to RI Division of Taxation. The Sellers file their nonresident tax return to RI Division of Taxation by the next April 15th to determine if withholding amount met their tax obligation or not and determine if owe additional money or entitled to a refund. The other option is a Seller can pre-file with RI Division of Taxation 20 days before closing to calculate the net gain on the real estate and pay 6% on the net gain ?or claim an exemption based on the personal residence exemption or 1031 exchange exemption. Seller still files a non resident return for the tax year by April 15th.

What is the best way for people to reach you and or your company?

I am usually available by my office phone 401-849-6200 and we do have a live receptionist who can often answer basic questions; and I have legal assistant designated for closings; also we have a website www.silvalawgroup.com that you can find information and contact us through that site; and my direct email is coffenberg@silvalawgroup.com.

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Phone: COffenberg@silvalawgroup.com

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