Responsibilities of an Attorney for Buyer in a Residential Real Estate Transaction

1. Pre-Contract or at Initial Contact with Client
   
   
   1. Discuss the impact of entering into a contract.
      
      
   2. Determine the type of property the client wants to buy.
      
      
   3. Discuss client's present living arrangements (if a lease, how long; if selling residence, should offer be contingent upon sale, interim financing, etc.).
      
      
   4. Determine whether the client has contacted a real estate agent, and if so, whether the agent is employed by the Seller.
      
      
   5. Determine whether the client has been asked to sign anything, especially an offer to buy real property.
      
      
   6. Determine whether the offer contains an Attorney's Modification or Attorney's Review clause.
      
      
   7. Determine whether the client has met with a mortgage loan officer, if financing is required.
      
      
   8. Determine whether a co-signer will be necessary.
      
      
   9. Discuss with client other necessary elements of transaction (necessity of attending the closing, method of holding title, for married couples the requirements to utilize Tenancy by the Entirety and the benefits involved, possibility of using a trust, lender's reaction to use of trust, Banking Act requirements regarding title-holding trusts, etc.).
      
      
   10. Determine marital status of multiple buyers; discuss estate planning concerns for non-related joint owners.
       
       
   11. Describe attorney's fee structure; prepare representation agreement if desirable. If no real estate agent is involved, discuss additional responsibilities placed upon attorney and impact of same on attorney's compensation.
       
       
   12. Be prepared to recommend the services of real estate agents, home inspectors, mortgage loan officers, etc. as necessary.
       
       
   13. Discuss desirability of inspecting the property, the role of home inspectors, the problem presented by the possible existence of unacceptable levels of Radon contamination.
       
       
   14. Determine who will prepare offer to buy; discuss when an offer becomes a binding contract; discuss the effect of an Attorney's Modification letter or Attorney's Review letter in light of recent case law developments.
       
       
   15. Discuss arrangements regarding taking possession of the premises; determine when possession will be surrendered (at "moment" of closing, same day, etc.) and whether Post-Closing Possession Agreement will be necessary or desirable.
       
       
   16. If Listing Sheet available, compare with offer as drafted to make sure that any representations in listing are included in offer.
       
       
   17. Depending upon the time of year and the county involved, check with local Assessor for updated information regarding changes in assessed valuation of property, residential exemption and/or Seniors' exemption, tax multiplier and/or tax rate changes.
       
       
   18. Review Offer (Contract and all Riders) if available and review with client. Draft offer whenever possible. Review Seller's Real Property Disclosure Report when and if available.
       
       
   19. Obtain name, address, telephone numbers and facsimile number of clients, other attorney,^' all real estate agents, and mortgage loan officer and loan processor, if any.
       
       
2. Upon Execution of Contract and prior to Closing
   
   
   1. Determine that earnest money is properly deposited.
      
      
   2. Determine whether contract is subject to review, modification or approval by attorney and tailor response accordingly.
      
      
   3. If contract subject to review, modification or approval, determine where and in what manner notice must be sent; determine whether additional method of sending notice is available or desirable; send copy to client and others interested.
      
      
   4. Discuss proposed modifications with client prior to delivery of notice. Determine impact notice will have on transaction.
      
      
   5. If contract contains a rider or contingency regarding property inspection, determine whether a professional inspection and/or written report is required, determine manner of delivering notice of deficiencies, whether copy of report needs to be delivered and to whom, determine and/or negotiate the areas, subject matter and aggregate minimum repair costs covered by the rider or contingency; advise when it would be necessary or desirable to obtain written estimates for repair of alleged deficiencies.
      
      
   6. Conduct negotiations regarding issues raised under property inspection rider or contingency; send copies of correspondence to client and others interested.
      
      
   7. Discuss with client the necessity or desirability of obtaining repairs vs. credits, and any potential objections to credits by a lending institution.
      
      
   8. If repairs are negotiated, determine completion date and method of reinspection. Prepare any required notice of non-compliance.' Draft Repair Escrow Agreement if necessary.
      
      
   9. Discuss with client the possibility of Radon contamination; advise regarding present EPA Action Level; discuss mitigation or remediation of Radon.
      
      
   10. Discuss with client the issue of potential mold; advise that very few species of mold are toxic and determine the presence or absence of toxic mold; advise that no current objective standards exist (unlike that of Radon) to determine danger level; discuss appropriate manner for mold remediation.
       
       
   11. Diary and monitor dates for preclosing contingencies and obligations (especially financing and sale of other real property); determine notice requirements of contract regarding these events; send copy to client and others interested.
       
       
   12. Determine whether client's attendance at closing is required by lending institution; discuss usage of power of attorney (given to co-owner or to attorney at law); make preliminary arrangements with lender if client will not attend closing.
       
       
   13. Obtain and review Good Faith Estimate of Settlement Costs; determine any adjustment provisions, "balloon payment" dates or other important elements of financing terms and discuss same with client; discuss APR and Mortgage Escrow Account Act.
       
       
   14. Determine whether taxes, insurance or other items will be required to be paid into a lender's escrow; obtain estimated amounts or rates and determine whether same are appropriate.
       
       
   15. Review lender's requirements for title insurance and attempt to avoid duplicative items; review title invoice to avoid excessive expenses to client.
       
       
   16. Draft and serve financing clause extension notice(s) and other contract contingency extension requests (e.g., sale of other real property) if necessary.
       
       
   17. Obtain and review commitment for title insurance; discuss unusual title concerns with counsel prior to closing.
       
       
   18. Determine method for obtaining municipal transfer stamps when necessary.
       
       
   19. Draft rider or letter agreement regarding items negotiated after contract signed; send copy to client and others interested.
       
       
   20. Review survey if available prior to closing; determine that survey will satisfy title company regarding type of title insurance coverage requested.
       
       
   21. Determine and evaluate ability of closing agent; be prepared to propose alternate closing agent if necessary; determine whether closing agent was selected in accordance with requirements of RESPA.
       
       
   22. Provide letter to client setting forth procedure for closing, documents (if any) required, time, date and place of closing, type of funds required, conditions to be satisfied, manner of identification, etc.
       
       
   23. Discuss with client procedure for obtaining required funds and necessary lead time for Money Market withdrawals, wire transfers, etc.   Contact closing agent in advance if using wire transfer.
       
       
   24. Review seller's and lender's figures for accuracy; attempt to make corrections prior to closing. advise buyer of amount needed to close.   Draft real estate tax reproration agreement if necessary.
       
       
   25. Clarify possession arrangements; draft pre-closing or post-closing possession agreements as needed.
       
       
   26. Discuss procedure for pre-closing inspection, coordinate if necessary; prepare notice of deficiency, if necessary; send copy to client and others interested.
   
   

   AA.	Draft and serve Demand for Closing if necessary; verify that      client is ready, willing and able to close.
   BB.	Advise seller as to the manner in which the buyer will take      title, if other than as set forth in the contract or in prior      correspondence.
   CC.	Obtain copy of lender's conditions of disbursement and/or      closing instructions; assist in the satisfaction of such      conditions at or before closing.

   
   
   
3. At Closing
   
   
   1. Briefly outline for client the procedure for closing, including the roles of the participants.
      
      
   2. Do mathematical calculations and review of contractual provisions in advance of closing.
      
      
   3. Briefly explain legal effect of mortgage documents after review of salient terms.
      
      
   4. Resist the temptation to impart to your client everything you know about real estate law and procedure; resist the temptation to direct your client to sign documents without your review and explanation.
      
      
   5. Address errors in lender documents to the attention of the closing agent.
      
      
   6. Respond to questions regarding tax consequences and deductibility to the best of your knowledge.
      
      
   7. Review all documents tendered by seller; briefly explain salient terms to client.
      
      
   8. Determine responsibility of RESPA compliance, IRC 1099 compliance, FIRPTA compliance (if applicable); retain copies of documents demonstrating compliance
      
      
   9. Use discretion in cases of "harmless error".
      
      
   10. Carefully review all figures prior to disbursement.
       
       
   11. Have title agent or closing agent confirm in writing the waiver of all unpermitted exceptions and/or obtain a copy of a signed Escrow Disbursement Agreement reciting exceptions which will remain on Schedule B of title policy.
       
       
   12. Obtain copies of releases of liens or encumbrances of record and/or payoff statements for money encumbrances.
       
       
   13. Obtain copy of deed to be recorded. Advise regarding preparation and delivery of recorded deed and title policy.   Arrange for delivery of original recorded deed and policy to attorney; retain copies after receipt.
   
   
   
4. Condominium Units and Other Property subject to a Homeowners' Association
   
   
   1. Negotiate for, receive and review all documents containing financial disclosure.
      
      
   2. Determine whether Special Assessments are pending or anticipated. Determine that regular assessments are currently paid in full.
      
      
   3. Advise regarding necessity of adequate reserve.
      
      
   4. Determine that Right of First Refusal or other pre-emptive right will be waived.
      
      
   5. Determine that Buyer has received copy of Declaration, By-Laws, recreation or pool passes (if applicable) and method of payment of assessments; review Certificate of Insurance.
      
      
   6. Advise regarding responsibility (if any) of client for repairs or maintenance.
      
      
   7. Advise regarding Limited Common Elements.   If a garage space is involved, determine whether title will pass to space along with unit. Review contract to make sure that garage space is included in transaction.
   
   
   
5. New Construction
   
   
   1. Candidly advise regarding "typical" one-sided nature of negotiations with builders.
      
      
   2. Discuss with client differences between transactions involving new construction and existing structures (especially earnest money deposits and closing dates).
      
      
   3. Seek specificity regarding details of construction, holdback rights, "liquidated damage" provisions, etc.
      
      
   4. Review financing commitment (if any) for limitations in duration.
      
      
   5. Review extras, options and credits; determine impact on loan-to-value ratio, if applicable.
      
      
   6. Determine responsibility for real estate taxes for year of transaction; negotiate with lender to prevent excess real estate tax escrow deposit.
      
      
   7. Review "punch list" items; negotiate terms of completion; review Certificate of occupancy for conditions.
      
      
   8. Review Builder's Limitation of Warranty or other warranty program; advise client regarding claim procedure.