Dear Buyer(s): Our firm has been retained to conduct the closing on the property that you are purchasing. To ensure a smooth transaction, promptly review the information below and then sign this letter where indicated on page 5. Please provide the following items to our office immediately:
Executed copy of this letter; a copy of your Driver's License; A Completed Buyer info Sheet (paying particular attention to section 7 thereof);
1. Whom We Represent: We represent you as the Buyer, to the extent of ensuring that you acquire good and marketable title to the property. We can also advise you on any legal questions concerning title to your property, title insurance, and the covenants and conditions of your loan documents. We represent the mortgage lender, if any, to the extent of assuring full compliance with its loan closing instructions.
We do not represent you with respect to the terms of your loan agreement with your mortgage lender unless you are receiving your funding from the Seller but will explain the Lender documents to you. Therefore, please confirm the final terms of your loan with your loan officer or mortgage broker a sufficient amount of time prior to closing to enable you to carefully resolve any disagreements or disputes with the lender concerning the terms of your loan.
2. What Services We Perform: With your direction and input, we will review and negotiate the terms of the contract to purchase your property unless it has been negotiated and agreed to prior to our firm being retained. We will conduct the title examination of the property; review the survey, environmental reports and inspection reports prior to theclosing if you ordered such reports prior to closing; advise you regarding the inspection period and potential and actual issues that may arise; ensure the deed of conveyance and loan closing documents have been properly prepared and executed; attend and conduct the closing and explain the loan documents to you; receive and disburse the closing funds properly and pursuant to the closing disclosure prepared by our firm or your lender and reviewed by you at or prior to the closing; prepare any other documents necessary in conjunction with the closing, close the transaction and record the deed and deed of trust or other necessary documents, ensuring the owner's and lender's policies of title insurance are issued in proper form.
3. Title Examination: In our examination of the title to the property you are purchasing, if we are able to locate an existing title insurance policy, we will "tack" to that policy. This means our title examination would begin with the date and time of issuance of that policy, and we will not certify the status of title to the property prior to the date the policy was issued. While defects in title occurring prior to our search prior would not be reported by us if we "tack," any such defects would be covered by an existing title policy, so you should receive the same title insurance coverage as if we had conducted a full examination.
This method of title searching will promote a more expeditious closing and a reduced closing cost to you as we will spend considerably less time conducting the title examination than if we did not tack. Our title insurance company routinely issues title insurance on property based upon these types of title searches, as it is a customary procedure to do so. If you would like to discuss or request a full title search (30 years) please call us and we will discuss that option with you.
4. Title Insurance: Examination of title is an important matter, but even the most careful examination will not reveal certain defects in title. This is the reason for title insurance, which lenders will typically require, and we always recommend. We will be securing for the lender a title insurance policy in the amount of the loan principal. We will also secure for you an owner's policy of title insurance that will be issued in the amount of the contract sales price. You will be required to pay the title insurance premium, which is normally computed at a rate determined by statute. This is a one- time fee paid to the title insurance carrier, which covers you for any defects in the title of the property.
5. Survey: We highly recommend all Buyers of property to obtain a current survey of the premises being purchased. If a mortgage lender requires a current map or survey of the property, you will bear the cost of a new survey. You will be responsible for ordering the survey, as we do not order surveys for our clients. Please let us know, if you are going to be sending a new survey, as we must prepare the new legal description from the survey. The title insurance company will insure you even without a survey, but it may not insure you regarding defects and/or encroachments and violations that could be disclosed by an accurate survey.
A survey may be beneficial to you in determining, among other things, whether the property of the adjacent owner encroaches upon the property you are purchasing or whether an improvement has been erected which encroaches on the property. It is our recommendation that every buyer obtain a survey prior to the closing.
6. Loan Documents: Unfortunately, it has become the norm to receive closing documents from the various lenders very late in the process, sometimes only minutes before the closing is scheduled to begin. Understand we will do our best to prepare the closing documents expeditiously, but the receipt of the closing package is largely out of our control. If you desire to review your Settlement Statement before closing, please understand we cannot prepare it until the lender has forwarded to us the closing documents. We suggest you discuss this matter with your lender to facilitate a smooth closing.
7. Restrictive Covenants, Zoning and Usage: It is our practice to provide a copy of Restrictive Covenants, if any, at closing as a courtesy to our buyer clients; however, we do not review restrictive covenants prior to closing unless your survey discloses a possible violation of the covenants. If you wish us to review your restrictive covenants for any other reason, we will do so for an additional fee. We do not ensure the property, including the structures located thereon, complies with zoning regulations, nor are we certifying as to whether there is surrounding farmland. A title examination also does not reveal whether the property is suitable for a particular use.
8. Repairs: Unfortunately, Sellers sometimes do not complete repairs. We recommend you confirm any requested repairs have been completed before the closing. We will not hold funds in escrow for repairs.
9. Cancellation of Liens: As part of the closing, we will ensure all liens against the property are cleared. That includes obtaining payoffs of the Seller's mortgages, if any. While we guarantee payment of the liens, the nature of the practice in this locale prevents us from following up to make sure the liens have been effectively cancelled at the Register of Deeds office. It is the lender's responsibility to cancel such liens, but if it is not done and as such becomes an issue for you in the future, we will provide assistance at that time for an additional fee.
10. Our Fees: Our fees for the above-described services begin at a minimum of $1,500.00 for a commercial closing (unless you have been quoted another fee Commercial Closings wherein the purchase price exceeds $750,000.00 will be charged on a case-by-case basis depending upon the nature and complexity of the closing. Since our title search is performed in advance, we will invoice you for the portion of our fee which covers the title search and examination if the closing is cancelled for any reason, even if your sales contract, if applicable, calls for closing costs to be paid by seller. If there is a foreclosure in your title, which must be examined for accuracy thereof, your fees will increase by approximately $250.00. Should additional services be requested or required beyond those described herein, additional fees may be incurred. Without limiting the definition of "additional services," examples would include preparation ofa power of attorney, subordination, road maintenance agreement, easement, review of environmental reports, engineering or other reports, preparation of a deed of release, or a simultaneous second mortgage. We may also charge a fee if the closing is delayed or postponed through no fault of our office after the closing documents have already been prepared.
Out-of-pocket expenses, including, but not limited to, wire fees, courier fees, the survey fee, appraisal fee, environmental report fee, inspection report fee, engineering or other reports, the title insurance premium, the hazard insurance premium, recording fees or broker fees will be additional costs to you and will be reflected on the closing disclosure.
Property Taxes
Property taxes for the current year are prorated between the buyer and seller at closing. In calculating taxes, our firm will base prorations upon either (1) the current year's tax bill, or if the current bill has not been issued; (2) the prior year's tax bill, or if the property is a new build; (3) an estimate based upon the value of the property. All prorations are final regardless of any change in the tax rates by the taxing authorities or annexation of the subject property after the date of our closing prorations.
Closing figures, Closing Funds, and Disbursement of Funds
Our firm will make every effort to provide you with final closing figures prior to your arrival at our office. In some instances, we are unable to meet this goal. Under North Carolina's Good Funds Settlement Act and State Bar regulations, all amounts due from you at closing (if any) must take one of the following forms: wire transfer; bank or cashier's check, drawn on or issued by a FDIC-insured financial institution; or money order. Please note that any bank or cashier's check not received at least 24 hours prior to closing will delay funding. Please make checks payable to: Plyler, Long & Corigliano, LLP, Trust Account.
**IF FUNDS DUE FROM YOU ARE IN EXCESS OF $500.00 FUNDS MUST BE WIRED TO OUR TRUST ACCOUNT. NO OTHER FORM OF FUNDS WILL BE ACCEPTED! NO EXCEPTIONS!**