Borrower Disclosures

Alan B. Sharaf, Esq.
Betsy J. Kelley, Esq.
Michael R. Maloney, Esq.
Paula B. Olender, Esq.
Charles W. Clark, Esq.

Dear Buyer:

We are pleased to inform you that our office has been selected by your lender to conduct the Closing for your property. A paralegal from our office will calling you to arrange for the time and place of the closing and to confirm the amount of money (if any) you will need to bring to the closing. We will do all that we can to make sure that this important transaction goes smoothly for you. Please share this letter with your attorney, or feel free to call Alan B. Sharaf at (617) 277-7887, Betsy J. Kelley at (508) 717) 0407, or Michael R. Maloney at (508) 230-8060 with any questions.

Please review all sections below so that you are prepared for your closing.

l. Closing Funds: Your paralegal will tell you the day prior to your closing the amount of funds that you need. Unfortunately, we do not know the amount of your closing costs until that time. All Buyer’s closing funds must be in the form of a cashier’s or bank check, drawn on a Boston area bank and made payable to yourself. Please also bring a personal check for any adjustments (oil, water) that may need to be made.
If your paralegal cannot tell you the exact figure that you need in sufficient time for you to arrange your finances, you should estimate as follows:

Purchase Price
(-) minus       Deposit Paid
(-) minus       Mortgage Amount
(+)plus          Closing Costs (See your good faith estimate of settlement charges or ask your lender for an estimate of total closing costs.)
(=) equals     Amount to Bring to Closing in a Bank Check

We will accept a personal check for any balance due which is less than $1,000.00. If you are short more than $1,000.00, we will ask you to go to your bank for the difference. Any overpayment will be refunded to you by a check from our Clients’ Funds account.

2. Hazard (Homeowner’s) Insurance: If you are buying a single-family or multi-family house you are responsible for bringing an original hazard insurance binder with a paid receipt showing that you have paid the current year’s premium, even if your Lender is escrowing homeowner’s insurance payments. The insurance binder must name your Lender as loss payee. Please refer to your commitment letter for the Lender’s name and address, as it should appear on the insurance binder.

Please call us and provide us with the name and telephone number of your insurance agent. A copy of the binder must be faxed to your paralegal prior to the closing.

If you are buying a condominium unit, your Lender will need to be named on the Condominium Certificate of Insurance as the loss payee for your unit. Usually the real-estate broker will obtain this certificate from the condominium Management Company or Condominium Trustees. Please check with the real estate broker to make sure this is done prior to the closing or whether you need to contact the management company or the Condominium Trustees. A copy of the binder must be faxed to your paralegal prior to the closing.

3. Title Insurance: Your lender will require you to purchase Lender’s Title Insurance. The cost of Lender’s Title Insurance is $2.50 per thousand dollars of the loan amount, rounded up to the next thousand dollars. Lender’s Title Insurance protects only the Lender’s interest and remains in force until you pay off the loan. Therefore, if you ever refinance your loan, you will have to purchase Lender’s Title Insurance for the new loan amount. Most buyers also purchase Owner’s Title Insurance. Please ask your attorney about Owner’s Title Insurance, or call, and we will be happy to discuss this with you prior to the closing. Also, see the enclosed statement on Owner’s Title Insurance.

To purchase Owner’s Title Insurance, you pay a one-time fee at the closing. Owner’s Title Insurance covers your property for as long as you own it. It is separate from Lender’s Title Insurance. Once you purchase Owner’s Title Insurance you do not need to purchase it again in the event you refinance your loan.

The cost of simultaneously issued Owner’s and Lender’s Policies is $3.65 per thousand dollars of purchase price rounded up to the next thousand dollars, plus $175.00.

*Please note that we also offer and recommend enhanced Lender’s and Owner’s Title Insurance Policies. The enhanced policies provide additional coverage, which includes protection for boundary disputes and limited protection for construction defects, zoning violations and prior building permit violations. The cost is only about 10% more than the regular title insurance policies. Therefore, an enhanced policy will be provided for you at closing unless you request the limited policy only.

Here is an example of the cost of regular title insurance based on a Purchase Price of $150,000.00 with a loan amount of $125,000.00:

Cost of Owner’s and Lender’s Policy ($3.65 x $150,000.00) + 175.00) = $722.50
Cost of Lender’s Policy Only (required by Lender) ($2.50 x $125.000.00) = $312.50
Additional Cost of Owner’s Policy to Buyer = $410.00
Price for enhanced policies with the above purchase price and loan amount: Cost of Owner’s and Lender’s Eagle Policies ($4.00 x $150,000.00) + $175.00) = $775.00
Cost of Lender’s only Eagle Policy (required by Lender) ($2.75 x $125,000.00) = $343.75
Additional Cost of enhanced Owner’s Policy to Buyer = $431.25
Difference between the cost of enhanced protection and regular policy = $21.25

4. Walk Through: Please make sure that you conduct a walk through of the premises to insure that the Seller is delivering the property in the condition required under your Purchase and Sale Agreement. Please try to resolve any issues prior to coming to the closing.

5. Homestead: This office will prepare a Declaration of Homestead for further protection of your property, if it will be your principal residence. Once this Declaration of Homestead is on record, it protects, in most circumstances, up to $500,000.00 of equity (over and above your mortgage amount) that you may have in the property from creditors. Our fee for preparing this document is $75.00. You must also pay the recording fees of the Registry of Deeds: $35.00.

6. Photo Identification: Please bring a government issued picture I.D. with you to the closing.

The Sellers, or their attorney and broker will bring a deed, keys, smoke detector certification, final water and sewer bill (if applicable), oil reading (if applicable), and certificate of paid condominium charges (a 6(d) Certificate, if applicable) to the closing.

The closing itself usually takes 30 to 60 minutes. You will be asked to sign a settlement statement, promissory note, mortgage and various other bank documents. If you have any special scheduling requests such as back-to-back closings or time restraints, please let your paralegal know as soon as possible, so that she can schedule your closing accordingly. Also, our office is child and infant friendly. Please do not feel that you have to arrange for a sitter, unless that would be more convenient for you.

We look forward to working with you. If you have any questions that your paralegal cannot answer, please feel free to contact us directly anytime. It will be our privilege to serve as closing attorneys for this important event: the purchase of your new home.

Sincerely yours,

Alan B. Sharaf, Esq., Betsy J. Kelley, Esq. and Michael R. Maloney, Esq.

IMPORTANT REASONS TO CONSIDER PURCHASING
OWNER’S TITLE INSURANCE

Owner’s Title Insurance will protect you against some hidden risks that would not be disclosed by even the most meticulous search of public records. It will also pay all legal fees regarding defense of your title.

Coverage provided when standard owner’s title insurance is purchased:

1. Someone else owns an interest in your title
2. Improperly executed documents
3. Pre-policy forgery, fraud and duress
4. Defective recording of a document
5. Undisclosed restrictive covenants
6. A lien on your title because of a security deed, judgment, tax or special assessment, or a charge by a homeowner’s association
7. Unmarketable title

Additional Coverage provided by Enhanced owner’s title insurance:

1. Mechanics’ liens
2. Forced removal of a structure which encroaches onto another property or an easement
3. Forced removal of a structure which violates existing zoning laws*
4. Forced removal of a structure because of a violation of a policy restriction
5. Inability to use land for single-family dwelling because of a violation of a zoning ordinance or policy restriction
6. Pays rent for substitute land or facilities
7. Rights under unrecorded leases
8. Plain language
9. Unrecorded easements
10. Building permit violations
11. Restrictive covenant violations
12. Map, if any, not consistent with legal description
13. Covenant violation resulting in reversion
14. Enhanced marketability
15. Violations of building setbacks
16. Discriminatory covenants
17. Actual vehicular and pedestrian access based on a legal right
18. Boundary walls and fence encroachment*
19. Post-policy forgery
20. Post-policy encroachment
21. Post-policy damage from minerals or water extraction
22. Post-policy Living Trust coverage for beneficiary
23. Post-policy automatic increase in value
24. Post-policy adverse possession
25. Post-policy cloud on title
26. Post-policy prescriptive easement
27. Insurance coverage forever

The one-time cost to purchase Owner’s Title Insurance is based on the purchase price of the home you are buying; whereas Lender’s Title Insurance (which is required) is based on the mortgage amount. Owner’s Title Insurance will protect you from these risks in an amount up to the purchase price for as long as you own the home. Please review Section 3 of the previous letter for a comparison of costs of Standard and Enhanced Owner’s and Lender’s Title Insurance Policies.

* Subject to deductible and maximum indemnity liability, which may be less than policy amount.

Contact Us

Auburn
Brookline 617-277-7887 N. Dartmouth
South Easton508-230-8060 Lowell