SAMPLE REAL ESTATE CLOSING RETAINER LETTER subject to change without notice

Transcription

1 MITCHELL C. BEINHAKER, ESQ. JONATHAN S. GOODGOLD, ESQ. MERYL A. GRIFF, ESQ. GAVIN I. HANDWERKER, ESQ. KAREN S. WACHS, ESQ. ALSO ADMITTED IN: NEW YORK PENNSYLVANIA WASHINGTON, D.C. SAMPLE REAL ESTATE CLOSING RETAINER LETTER subject to change without notice LETTER VIA Mr. & Mrs. Robert Client 33 Bleeker Street Millburn, NJ Re: SELLER to CLIENT Subject Property St Blk Lot City, New Jersey Dear Mr. & Mrs. Client, Welcome to The Beinhaker Law Firm and thank you for using the services of our firm. We are honored that you have chosen us as your closing attorney for the purchase of your new home. Kindly return a signed copy of this letter to our office as soon as possible. THE CLOSING PROCESS This letter provides important information regarding the process of purchasing your home. It also outlines the conditions of our agreement to represent you. Please take a few minutes to review this letter and become familiar with the process of purchasing a home and the related obligations. In addition, you will find enclosed a number of items which require your immediate attention. Please note that if we are also handling the closing on the sale of your current residence, we will do so in the most expeditious manner. Most of the items contained in this letter will not be applicable to this transaction. However, there are a few items which require your attention. Please see the enclosed addendum, As the Seller.

2 Page 2 of 6 Please be advised, neither party to a residential real estate contract can be assured the transaction will proceed to closing until satisfaction of all conditions of the contract. We cannot and do not guarantee a successful completion of this transaction, but we shall exert every effort at all times to represent your interests and rights. When you signed the contract to purchase your home you put in motion a series of events, each having important dates. If you haven t done so already, please fax the purchase contract to our office. The first date is the date on which Attorney Review expires. Under New Jersey law, we have three business days from the date the contract is signed and delivered to both you and the Seller in which to disapprove the contract. Typically, we try to reach the Seller's Attorney during the three-day period to discuss proposed changes, and we confirm our agreement in letter form. You will find that we will mostly disapprove of the boilerplate contract you signed and provide our own Rider to Contract. This rider adds any and all provisions required by law and seeks to protect your interests in the case of an unexpected contingency or event. You will find a copy of the Rider for your review. Please sign it and fax it back to our office immediately. The Seller s Attorney will send a response from their office accepting our requested changes or asking for some additional modifications. After all contractual terms have been agreed to, your attorney review period will be concluded. AFTER ATTORNEY REVIEW Once Attorney Review is concluded, you must complete a general home inspection, radon inspection and pest infestation inspection. (If you are purchasing new construction, many, if not all, of these inspections will not be necessary.) These inspections must be completed within 14 days following the end of Attorney Review. There may also be the need for well, septic and/or pool inspections, et cetera. Other home inspections are not required, but most prudent buyers consider them a good investment. Please be sure to have any underground oil tanks tested using soil or pressure tests where appropriate. If you need referrals for any type of inspection or would like to discuss the need for any tests, please call our office. The home inspection usually includes a structural inspection, an inspection of the major systems (such as electrical, plumbing, heating and air conditioning), a check for any environmental hazards, such as asbestos, radon, leaking oil tanks, or urea formaldehyde insulation, as well as a general inspection of the home. Although not a requirement for closing, we strongly recommend getting such an inspection, except when purchasing new construction. During this inspection, spend time with the inspector as he or she reviews the home, as this is your first and best opportunity to get to know the property which you are purchasing. A good inspector will not only uncover potential problems which should be addressed prior to closing, but will also be able to help with questions about upgrades and renovations.

3 Page 3 of 6 It is important the inspections be completed within the allotted time and reports delivered to our office immediately upon receipt, giving us adequate time to relay the results to the Seller's attorney, within the time frame set forth in the contract and/or our amendments to the contract. If you are applying for a mortgage to complete your purchase, you should have already begun the application process. You will generally have 30 days from the end of attorney review to obtain a written commitment from your mortgage lender. If you have any questions or need assistance, including a referral to a mortgage lender, please contact our office immediately. Once the inspections have been completed, and the mortgage approved, we will order the title search and survey (not needed for condos and coops). A survey usually costs approximately $600.00, depending on the complexity and size of the property. If you desire to waive the requirements of property corner markers, you must sign a waiver. Corner markers vary in price but are approximately $ per marker. Many of our clients do not wish to incur this additional cost. The surveyor will provide a waiver which you must sign and return to our office if you wish to waive the corner stake requirement. Scheduling the closing itself can be difficult because of the number of parties involved. We do our best to accommodate everyone, but under New Jersey law you should be aware the date set forth in the contract is not written in stone. Indeed, it is considered a target date. We will make every effort to close on or about the closing date set forth in the contract, but please do not rely on that date until we have further assurance from both the Seller's attorney and your mortgage bank that said date is realistic and/or acceptable. These assurances often will not be procured until a week or two prior to the projected closing date. Prior to closing, you will have to arrange for homeowner's insurance. Your insurance agent must comply with your mortgage lender's requirements which we will provide to the agent upon request. If you are in need of a referral, we can recommend agents who have worked with our clients in the past in a timely and efficient manner. All mortgage lenders require proof of homeowner's insurance, usually via a paid receipt, but they vary considerably as to when they require it. Some will allow you to bring proof of insurance to the closing, but most require proof of insurance well in advance of closing. Normally, your mortgage representative will advise you or your agent of these requirements, but if not, our office will.

4 Page 4 of 6 FEES AND CHARGES At the closing, you will be required to bring a single certified check, bank check or cashier's check made in an amount necessary to close title. Either our paralegal company or your title agency will act as settlement agent and you will be provided payee information as we near closing. The amount you will be required to bring to closing will be the purchase price minus deposit monies previously paid minus the amount of mortgage plus closing costs. Closing costs vary considerably between each transaction and while we may be able to estimate them for you, an exact figure will not be available until the afternoon before closing. Our fee for each transaction is $1, and is based on a normal and timely closing. Our services including contract negotiations during the attorney review period and resolving inspection issues. Our paralegal staff will handle all other aspects of closing unless our legal assistance is required. In the event such legal services are required due to delays beyond our control or if your closing requires an extraordinary amount of additional work, you may be billed for additional services and expenditures. Our hourly rate for such additional services is $ Such services might include drafting or filing of loan discharges, lis pendens discharges, or other title issues that must be resolved, drafting of a Use & Occupancy Agreement, or other work required to close the transaction that is outside the scope of normal work needed to close title. If the contract is voided or cancelled, whether by you or the other party, you will be billed for our time spent on your behalf, up to the date of cancellation. Our legal fee is due and payable at closing. Additionally, the settlement agent (generally a title agency) may charge an additional fee to act as closing agent. These fees may run between $300 and $500 dollars, but are not guaranteed. A paralegal fee of $350, charged by an outside paralegal company, will be charged for day-of and postclosing work such as document preparation and recording of your deed and mortgage. There will be other closing costs required by your mortgage lender, if applicable. All fees will be detailed on your Respa-HUD1 Statement at closing. Fees for inspections will be paid by you directly to the home inspector(s) you hire. If, for some reason, legal and/or other fees quoted above, are not collected at closing (or only collected in part), you are still responsible for all charges. Unpaid balances will incur interest charges at the rate of point zero five percent (.05%) per day (18.25% per annum) and any costs of collection including time charges and/or filing fees will be added to your bill. You agree that any collection suits, or related legal proceedings, will be brought in Union County, New Jersey.

5 Page 5 of 6 TERMINATION OF OUR SERVICES Our representation will terminate upon completion of this matter. We reserve the right to withdraw from this matter, however, for any just reason as permitted or required under the New Jersey Rules of Professional Conduct or by the Rules of Court. We will also withdraw at your request. In the event of withdrawal, you agree to promptly pay us for all services rendered and all fees and expenses incurred up to the date of withdrawal. Upon receipt of payment, we will forward your file to the attorney of your choice. INFORMATION AND COMMUNICATION Unlike many attorneys, it is our goal to not only help you reach your closing date as quickly as possible, but also to be sure you understand and are comfortable throughout the closing process and beyond. The purchasing of a new home (especially if it is your first purchase) is a stressful and exciting time and we seek to keep your stress and aggravation to a minimum. Clear and regular communication between you and our office is a big part of this. After closing of title is complete, you will receive post-closing information from our office. First and foremost, you will receive your recorded deed and mortgage from the County Clerk s office. We will retain a copy in our files. Three to six months after closing, you will be sent your original title policy. Please keep this with all your closing documents. We would also be happy to provide referrals for a moving company, to arrange for moving announcements, or any other issue. We have excellent relations with many vendors. During the period between contract and closing, you will undoubtedly have many questions. Always feel free to telephone if we can be of assistance to you. In addition, you will find enclosed the attorney s business card and our brochure, highlighting all of our firm s services, for your records. The business card includes his cell phone number. Although he prefers contact during normal business hours (M-F, 9am to 5pm), we understand that emergencies and issues often arise on weekends or evenings. Call our office phone first. If only voic can be reached and in case of an emergency, call his cell phone directly. We thank you in advance for your discretion and respect of his time and availability. Attached is a checklist summarizing the process and the contents of this letter. It should be used by you as a guide throughout this transaction to facilitate a timely and efficient closing.

6 Page 6 of 6 Please fax a signed copy of this letter back to our office. Thank you again for agreeing to have us represent you. We look forward to working with you on this matter. Should you have any questions, always feel free to call. Very truly yours, AGREED & ACCEPTED TO: Mitchell C. Beinhaker, Esq. Managing Director By: Mr. & Mrs. Client Encl. RE Closing Checklist