Real Estate - Residential Commercial
Our residential and commercial real estate markets are seeing new signs of life that were unthought-of just a few years back. There is nothing like owning your own home or purchasing an investment property. Both are excellent investments and foundations for a good future. But not all have the financial capacity to fund such an endeavor out of cash on hand and even those who do understand the value of leveraged finance.
In fact, most look to financial institutions for residential and commercial loans. Yet, closing either a residential or commercial loan can turn into a long and complicated matter if proper measures are not observed or followed. Worse yet, not being fully represented in a loan closing by your own real estate attorney can result in a failed venture. While there is no requirement to engage a business attorney to represent you in a loan closing or to act as the settlement agent for the transaction, by engaging a real estate lawyer you can ensure that you have a fiduciary working for your best interests.
The procedure for closing a residential loan will vary, but the outcome is generally the same. All the financial details that come with the purchase of your property and the receiving of the title have to be settled before the loan is made. By retaining an experienced real estate attorney to represent you in the closing process, you can ensure that you are purchasing a property which is free and clear of title defects and satisfies your investment objective.
You should prepare for your closing by consulting with your real estate lawyer to help you review all your closing documents to be sure everything is in order. Some of the primary closing documents are as follows:
- The Mortgage Note
- The Mortgage
- The Settlement Statement, commonly referred to as the HUD
Throughout the closing process your real estate attorney will review all the documents and explain each closing document to you before you sign them. And, if you have any questions, your attorney will answer them.
By their very nature, commercial loans frequently require increased attention and more paperwork than residential loans. Here are some of the requirements that you may need.
- Operating Statements for the past 3 years reflecting income and expenses of operations, including cost and timing of scheduled capital improvements;
- Certified copies of all Leases;
- A Certified Rent Roll;
- Estoppel Certificates signed by each tenant;
- Site Improvements Inspection Report;
- An ALTA lender’s title insurance policy with required endorsements;
- Copies of all documents of record which are to remain as encumbrances following closing, including all easements, restrictions, party-wall agreements and other similar items;
- A current Plat of Survey prepared in accordance with 2011 Minimum Standard Detail
- Requirements for ALTA/ACSM Land Title Surveys certified to the lender, Buyer and the title insurer, including items 1 through 4, 6(a), 7(a), 7(b)(1), 8 through 10(a), 11(a) and 14 from the Surveyor’s “Optional Survey Responsibilities and Specifications” referred to as “Table A”; and
- A satisfactory Environmental Site Evaluation Report (Phase I Audit) and, if
appropriate under the circumstances, a Phase 2 Audit, to demonstrate the property is not burdened with any recognized environmental defect; and