Get Ready for Closing
More about what you need to know for closing:
1. INSURANCE – Unless the property is a condominium, you must make sure that your homeowner’s insurance has coverage at least equal to the amount of your new mortgage, OR the policy must have a Guaranteed Replacement Cost endorsement. You must also inform your insurance agent to change the mortgagee clause on the policy. Specific instructions for the mortgagee clause may be contained in your commitment letter or may be obtained from your lender.
Your insurance agent must fax or e-mail a new binder to us at least four (4) days prior to closing. Also, please bring the new binder to the closing together with a receipt showing that the premium for the current policy period has been paid in full. Any other payment arrangement must be approved by your lender or may it be collected at closing.
2. FLOOD INSURANCE – If the premises is located within a specially designated federal (HUD) flood hazard area (Zone A) then flood insurance is a mandatory requirement and you must provide a flood insurance policy application together with a paid receipt for the full first year’s premium at or before the closing. Please note that if the premises is located within zone B, flood insurance is not required although it is highly recommended.
3. RENT LOSS INSURANCE – If this transaction involves a loan on investment premises then rent loss insurance may be required and an appropriate binder to that effect will be required at or prior to closing. You should check with the lender for applicability of rent loss insurance to you.
4. TITLE INSURANCE – A Lenders’ policy of title insurance is required for this transaction, which we will provide for you. The cost of the Lenders’ title insurance will be accounted for at closing and is usually paid by the borrowers. The Lenders’ Policy names only the Lender as beneficiary for claims made under the terms of the policy. The Lenders’ policy does not provide any coverage for the buyer/owner. Unless you inform our office otherwise we will issue you an Owner’s Title Insurance Policy at an additional cost to you at closing. The Owners’ Title Insurance Policy covers your interests, as the buyer/owner of the property for claims made under the terms of the policy. The one time premium for an owner’s policy can be quoted to you by calling our office. Notify our office immediately if you do not want title insurance coverage for yourself, or if you have any questions. Please see the Owner’s Title Insurance information with this email for more information.
Click here to learn more about title insurance.
5. CONDOMINIUM INSURANCE – If the property you are purchasing is a condominium unit, the lender will require a Certificate of Insurance from the insurance carrier for the condominium naming the lender and you as covered under the condominium’s Master Policy. The language naming the lender must be in a specific form. Instructions for the mortgagee clause may be contained in your commitment letter or may be obtained from your lender.. Please note that you may be required to purchase additional insurance if the insurance company does not provide 100% replacement cost coverage.
6. OTHER CONDOMINIUM REQUIREMENTS – If the property you are purchasing is a condominium unit, a “6 (d)” certificate stating there are no unpaid common charges due to the condominium association as of the date of closing must be produced. This certificate is obtained from the trustees or managers of the condominium association and must be in the form prescribed by law. You should confirm that the Seller will provide this document at or before the closing. A final prorated adjustment for the condominium association fees will be made between the Buyer and Seller as of the date of closing. Our office will not be responsible for making any adjustments unless the figures are provided to us prior to closing.
7. MANNER IN WHICH TITLE WILL BE HELD – Click here for an explanation of some options for how to hold title to real estate. Please telephone our office and inform us of how you would like to take title to the property. This information should be provided to us as quickly as possible since many documents which we prepare require this knowledge. Failure to provide this information in a timely fashion could delay your closing.
8. OUR CERTIFICATE OF TITLE – In Massachusetts we are required to certify to you that the title to the premises meets the standard prescribed by law. Our certification to you should not be construed as establishing an attorney/client relationship between you and our office. The services we render are only on behalf of the mortgage lender, and we cannot advise or counsel you relative to the transaction.
9. SMOKE DETECTOR COMPLIANCE – In Massachusetts, when selling a residential property, the Seller is required to have the property inspected by the local fire department for working smoke and carbon monoxide detectors, and will need to provide an official inspection certificate at closing.
10. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT OF 1980 – If you or the seller are a non-resident or resident alien of the United State the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA) places special requirements for tax reporting and withholding on the parties to a real estate transaction under certain circumstances. You should seek the advice of your attorney or accountant concerning the effect of this Act on you and this transaction.
11. WATER, SEWER AND ELECTRICITY – You should confirm that the Sellers will obtain a final reading of the water meter so that all outstanding water and sewer bills are paid in full and adjusted at the closing. If you are purchasing a condominium unit, it is likely that water and sewer charges are included in the monthly condominium fee. In that case, a final water and sewer bill is not required. If electricity is provided by a municipal light plant, the Sellers should obtain a final electric reading. A final adjustment for payment of any utilities should be made at closing. Our office will not be responsible for making any adjustments unless the figures are provided to us prior to closing.
12. NEW CONSTRUCTION – If you are purchasing new residential construction, the Builder/Seller will need to provide a final unconditional Certificate of Occupancy (CO) issued by the municipality. This certificate must be provided to our office 24 hours prior to closing.
13. PHOTO IDENTIFICATION – You will be require to show a photo identification (driver’s license or state or government photo ID) at the time of the closing. Be sure to double check the expiration date of your ID before closing. The closing attorney will need to see proof of your identity and make a copy.
If you have any other questions or concerns about your closing, please do not hesitate to contact us directly at 978-847-0104. Our team directory can be found here: Directory