Ganek Wright Minsk PC
197 Fourteenth Street
Atlanta, GA 30318
Commonly Asked Questions
In Georgia, conducting home closings is considered the practice of law and they are therefore conducted by lawyers. In most cases the Buyer is obtaining a mortgage and the lender requires a lawyer to represent their interests at a closing. The cost of the closing attorney is quoted by the lender in the beginning of the process as part of the “loan closing costs”. In the sales contract, either the Buyer or Seller will agree to pay the closing costs and the closing attorney, among other costs, is included. The fee for closings is usually in the neighborhood of $450.00-$500.00. Sometimes a Buyer or Seller will require their own lawyer be present and will contract with them separately. Most Buyers and Sellers rely on their team of realtor and lender to advise them of the need for separate representation and the closing attorney is most often the only lawyer involved. A good closing attorney will represent the lender and “keep his eye open” for any situation that might prompt the need for separate representation and make that point when necessary. When in doubt you can always retain your own lawyer for a fee. Typically, that fee is based on time spent and ranges from $200.00 to review documents by fax to $500.00 or more to attend the closing.
WHAT DOES THE CLOSING ATTORNEY ACTUALLY DO?
The closing attorney conducts the closing of the sale (or refinance). To do so he must gather information about the contract, the loan, title to the home, homeowners insurance, home warranties, termite inspections, land surveys and prepare documents that memorialize those matters. That requires a great deal of communication and coordination. Then he must supervise the closing itself including collecting and distributing funds and providing title insurance for the lender and buyer. Every closing is a little different and therefore the closing attorney must be very organized and patient and flexible.
WHO PICKS THE CLOSING ATTORNEY?
It depends. There are firms that do nothing but closings and they work with a variety of Buyers, Sellers, Builders, Lenders and Agents. The firms are approved by the various lenders in the city. Often, the Builder, Agent or Lender have a strong relationship with a particular closing attorney or firm based on reliable service and they will direct the closing occur at that firm. Sometimes, the Builder, Buyer or Seller will request a specific closing attorney. The criteria should be reputation, quality service, and fair pricing rather than location or convenience. If this service provider is picked by someone other than you ask why that firm was chosen and express your preference if you have one.
WHAT ACTUALLY HAPPENS AT THE CLOSING?
Buyers, Sellers, Lenders, Agents and the Closing Attorney gather at the law firm. Identification, homeowner’s insurance policies, termite letters, and certified funds are gathered. Problems will be discussed and questions will be answered. The attorney will go over the HUD1 settlement statement in detail. The attorney will then go over each of the loan documents with the Buyer and the transfer documents with the Seller. (If you wish to review the documents in detail arrange for advance copies.) Each party will sign his documents. The atmosphere is generally happy and organized. The attorney will make copies, hand out commission checks and Seller funds and see that keys are transferred. The agents will give advice on transferring utilities and practical matters. The process usually takes about 45 minutes or so.
WHAT IF THERE IS A PROBLEM AT CLOSING?
The Closing Attorney will do his best to supervise resolution of various problems that inevitably occur. The lender and agents also contribute to this process. Rarely can a problem not be solved. It really helps to have a good attitude!
WHAT IS TITLE INSURANCE AND DO I NEED IT?
There are two flavors of title insurance. Owners and Lenders policies. The lender will require their interest in the property be insured as part of the closing costs. That insurance does not benefit the Owner in any way. Owners have the option to insure or not at an additional cost. Generally, title insurance pays if something arises that could not be discovered by a title examination and resolved. For a lender, it protects their loan. For an owner, it protects their equity. Since our Georgia title records are behind the the title exams can not verify matters that occurred in the months before closing or matters which are not properly on the records. Common examples of surprises are construction mechanics liens filed by contractors, Federal Tax liens, judgments, unrecorded or misrecorded matters like easements, and unpaid past property tax matters to name a few. Other matters of concern are fraudulent documents, forgeries, or matters that would have show up if a survey were done. We prefer to issue “enhanced owners title policies” that expand in value as equity increases and also covers certain matters that occur after closing. In a typical transaction, let’s say a $100,000.00 home with a $90,000.00 home loan, the cost of the loan policy would be about $201.00 (part of the original closing costs estimate) and the optional owner’s policy would be $194.00. By the way, Georgia is the 49th cheapest title insurance rate state and the vast majority of owners insist on it. We recommend owners coverage in every single situation.
WHAT IS A SURVEY AND DO I NEED ONE?
A survey is a drawing of a particular piece of property showing boundaries, homes and other improvements and designated areas like easements and setback lines. In the example of a free standing house it can reveal problems like encroachments of fences and driveways or other improvements or violation of easements and setbacks. These types of problems can prevent an owner from improving or selling their property. A survey also helps verify the actual property being bought. A normal survey is $250.00 to $300.00 and is invaluable especially in new construction. Townhouses are also surveyed but condominiums don’t usually involve land area and therefore are not surveyable. If the survey reveals a problem, the seller must resolve it or the purchaser must accept it. In some cases a survey makes the title insurance coverage more powerful. A current survey is always recommended.
GIVE ME YOUR PROCESS STEP BY STEP?
Some one, typically a Buyer, Lender or Realtor will “order title” with us and schedule an appointment to close. We then: 1. Order a title Exam and Property tax statements and deal with title issues if any 2. Order a survey if requested 3. Contact the Buyer for information about their homeowner’s insurance, and advise them of the need to bring certified funds to closing and valid identification 4. Contact the Seller for information about the mortgages on the property that need to be paid off, homeowner’s association information, termite inspection information. Order statements to verify balances owed. 5. Contact the realtors for any special matters (repairs, invoices, special situations) 6. Prepare a HUD1 settlement statement outlining all the Buyer and Seller charges and collect loan documents from the Lender for signing at closing. 7. Prepare Warranty Deeds, Seller’s Affidavits, Title insurance paperwork, and other documents related to the transfer of the title to the house. 8. Call the Buyer with the exact amount of certified funds to bring to closing. 9. Conduct the closing and collect and disburse all funds. 10. Record the deeds, issue the title insurance policy to the Buyer.
I'M BUYING FOR THE FIRST TIME-HELP!
We suggest the following: 1. Familiarize yourself with the various steps that lead you to a completed sale. Learn the “lingo”. 2. Pick good realtors and lenders up front to assist you. Look for patience and a track record of success. Don’t be afraid to ask for references and check them. 3. Remember that the reason we, meaning realtors, lenders and lawyers have jobs is because you need a home! Set your expectations of our performance. Don’t be afraid to say “Hey, y’all, I’m a first time homebuyer and I need you to hold my hand”. 4. Ask questions about everything. Don’t assume everything is going right. Check with your team and let them know you are interested in the progress. Be proactive.
Driver's License or Passport - Buyers, Sellers, Borrowers Refinancing the Property all must establish proof of their identity. This is a safeguard against fraud and is a requirement of the Law Firm and the Title Insurance Companies that insure the transactions.
FUNDS IN PROPER FORMAT
Georgia law (O.C.G.A Section 44-14-13, the "Good Funds" law) requires all funds to be received by the closing attorney in excess of $5,000.00 be in the form of a wire. For amounts in between $1,000.00 and $5,000.00, a certified check issed by a local bank will be accepted. If you have any questions regarding these requirements, please contact the closing department so as to avoid any delay in the disbursement of your closing. Personal checks will be accepted for less than $1,000.00, at the discretion of the closing attorney. If you need to transmit funds by wire, please contact us for wiring instructions for the appropriate office's Escrow Account. If you are arranging funds in advance of our preparation of the Settlement Statement, we recommend discussing the estimated amount due at closing with your Lender, then wiring that amount to us. Certified checks, if applicable, should be payable either to "Ganek Wright Minsk PC", or to your own name and then endorsed to us at closing.
HAZARD INSURANCE (PROPERTY INSURANCE)
Buyers or Persons refinancing their homes: We will contact your insurance company and request evidence of insurance with instructions for payment of the premium by fax. If you receive these originals please bring them to closing.
TERMITE INSPECTION LETTER
Sellers: The original termite letter (including any graph pages that may be attached) must be brought to closing. We recommend faxing those to us in advance to review to avoid delay in your closing if issues arise.
A SENSE OF HUMOR
The process of buying, selling or refinancing is very stressful and the closing is often the culmination of several last minute processes. This is normal and to be expected. A good sense of humor will go a long way.
TYPICAL CLOSING DOCUMENTS INCLUDE:
HUD 1 SETTLEMENT STATEMENT
The settlement statement outlines the monetary aspects of the transaction.
PROMISSORY NOTE AND SECURITY DEED
The Note is the Lender's agreement regarding interest rate, term, late charges, prepayment options.
TRUTH IN LENDING DISCLOSURE
An expression of the interest rate "revised" (the APR)to reflect loan costs such as Lender fees and Private mortgage insurance. This form states the "APR" or the "Annual Percentage Rate" as calculated by the lender.
IRS FORMS W-9, 4506, 8801
Lender's use these forms to collect information about social security number and to authorize them to access actual filed tax returns from the IRS under certain circumstances.
TAX AND INSURANCE ESCROW
Loans often require monthly deposits to a tax and insurance escrow account. This document details the initial deposit and an estimation of the balance in the account the first year.
MISCELLANEOUS LENDER DOCUMENTS
Each loan will have a host of Lender forms relating to the specific loan product such as disclosures. There will be many general explanatory forms as well. Each lender and loan product has a slightly different set of forms.
BORROWER AND SELLER AFFIDAVITS
Both Buyer/Borrower and Seller will swear that there are no impending matters that could affect the title to the property.
Surveys, termite letters, well and septic inspections are all discussed in hold harmless documents.
The warranty deed will transfer title from the Seller to the Buyer.