Why do you need an attorney for a real estate closing?

Mortgage lenders are highly motivated to protect their investment, so many (or most) will require an attorney’s involvement during your real estate closing.

This isn’t done to make the process harder or more costly. It’s designed to protect all the parties involved and make sure that the buyer actually gets what they (and their lender) are expecting. Somewhere between the time the buyer makes an offer and the seller accepts it, all sorts of potential problems can crop up with the title or deed.

3 common title and deed issues

A deed is a document that is used to transfer and record ownership rights, or title, to a property. As you can imagine, it’s critical to make sure that everything is correct on a deed so that the title can be conveyed free and clear.

Some of the most common problems you may encounter include:

1. The long history of the property: Some areas of this country have been sparsely populated since the nation began, but Rhode Island has land and buildings that have been changing hands for many generations. That means there is an increased potential for errors on deeds and incorrect title transfers.
2. Boundary issues: While surveys are supposed to show accurate boundary lines, you can end up with competing surveys (based on the surveyor’s skills) that create questions about a property’s real borders, which can ultimately affect the property’s value and the buyer’s ownership rights.
3. Hidden encumbrances: An encumbrance is anything that gives another party interest in a property. This could be something like an old lien that was paid but never properly cleared from the records, or it could be a current lien that wasn’t paid off. It could also include easements that have been in place for decades (and long forgotten), or restrictive covenants that limit how part or all of the property may be used.

It takes a skillful understanding of the issues involved in a real estate closing to make sure that everything is properly completed. Learning more about the potential problems can help you ask good questions and demystify the process ahead.