A Letter to Buyers/Borrowers
Dear Buyer/Borrower:
As you may know, our office represents your Lender in matters relating to your request for a mortgage loan on the above-captioned real estate. We have commenced an examination of the title, ordered a Certificate of Municipal Liens from the Collector of Taxes and, if required, ordered a mortgage plot plan for the Bank’s records. Please note that this office represents your lender and any correspondence should not be construed as establishing an attorney/client relationship between you and our office.
When the above items are completed and reviewed by our staff, we will notify you to arrange a convenient time to close the loan. We will also advise you of any funds you may need to complete the transaction. Should you be required to bring funds to closing, you must obtain CERTIFIED or BANK CASHIER’S CHECKS made payable to yourself for these funds. In some cases, personal checks of $300.00 or less may be acceptable.
Please review the Bank’s commitment letter carefully. If special conditions are required, they must be met PRIOR to closing to the satisfaction of your Lender’s mortgage department.
Please review the below items carefully so that you are prepared for your closing.
If you have any questions or comments relative to the loan transaction, please do not hesitate to contact us.
Very truly yours,
William E. Heney
Attorney at Law
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A Letter to Sellers
Dear Seller:
Please be advised that the buyer(s) and/or the lender for the buyer of your has asked our office to perform services in connection with a mortgage on the above-referenced property being sold by you. There are some matters that we will require in order to expedite the transaction and prevent delays or extra costs to you.
In order to insure a smooth closing, we would like to make you aware of the following information, and we would appreciate your completing and signing the enclosed form and returning it to us in the enclosed, self-addressed stamped envelope.
1. MORTGAGES: If your property is presently mortgaged, the mortgage(s) will be paid off at the time of closing using proceeds from the sale, if any. Please complete the enclosed form and return it to us right away in order that we may contact the mortgagee(s) and make the necessary arrangements for payment. This is very important and requires your immediate attention. After your mortgages have been paid in full, the banks will send us discharges which we will record at the Registry of Deeds.
In the event there is a non-institutional mortgage (i.e. one given to a private individual, trust or corporation as opposed to a bank or loan company), we will require that the payoff amount be furnished to us before the closing and a discharge be delivered at or before the closing. UNFORTUNATELY, THERE CAN BE NO EXCEPTION IN THIS REGARD. If you are uncertain about whether an outstanding loan is held by a private lender, please contact our office or have your attorney do so. The obligation to furnish a discharge at closing applies also to outstanding attachments or other liens, if any.
2. DEED: The preparation of a new deed to convey the premises to the buyer is your responsibility. You should have your attorney send us a copy of the proposed deed as soon as possible and before the closing date. While we cannot represent your lender and you, we are sometimes asked to prepare a deed as part of our mortgage services. If you ask us to prepare your deed, there will be a charge to you of $150.00.
SMOKE DETECTOR and CARBON MONOXIDE CERTIFICATES: We call to your attention the provisions of Massachusetts General Laws, Chapter 148, Section 26E. You should contact your local fire department, arrange for an inspection, obtain a certificate of compliance and bring it with you at the time set for closing. (Please note that this does not apply in New Hampshire and Maine)
4. ELECTRICITY, WATER, SEWER, FUEL: If your electricity is provided by a municipal light plant, you must bring with you a final electric reading. Similarly, your fuel oil readings (if your property is not a condominium).
5. EXPENSES: You will also be required to pay for Massachusetts Excise stamps, recording fees to discharge mortgages and other liens and, where appropriate, to pay these items from the proceeds of the sale.
6. REGISTERED LAND: If your property is registered land, be certain to bring your Owner’s Duplicate Certificate of Title to the closing. Your property cannot be transferred and papers cannot be recorded without it.
7. POWER OF ATTORNEY: If there is a power of attorney involved, please send our office a copy of the power of attorney document prior to the closing. Ordinarily, the use of the power of attorney will have to be approved by our client and then the form and content thereof must be reviewed by our office.
8. CONDOMINIUM UNITS: If the transaction involves a condominium unit, you are required to provide a certificate pursuant to Massachusetts General Laws, Chapter 183A, Section 6(d). This certificate is obtained from the organization of unit owners and states the unpaid common expenses which have been assessed to the unit owner. You will also be required to provide a Certificate of Insurance naming, as insured’s, the buyer and your lender and its successors and assigns as their interest may appear.. It is imperative that the foregoing language be on the certificate of insurance. The trustees of the condominium trust can assist you in this matter.
9. SALE PROCEEDS: If the closing takes place in our office, we will make every attempt to record papers and disburse funds on the same day. Your funds will not be released to you until the deed and mortgage have been recorded at the appropriate Registry of Deeds.
10. TRUST OWNERSHIP: If this property is owned by a trust, our office also requires a trustee’s certificate. This certificate should state that the trust has not been terminated, amended or revoked; that the trustee(s) are the same and they have not resigned; and that so far as may be required by the beneficiaries, they have assented to the transaction. In addition, the statement should be acknowledged before a notary public and be in the form suitable for recording. We can prepare such a certificate at a charge of $50.00 if you request us to do so.
11. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT OF 1980 AS AMENDED: This Federal Law places special requirements for tax reporting and withholding on the parties to a real estate transaction under certain circumstances as set forth in the law. You should seek the advice of your attorney or accountant concerning the effect of this Act on this transaction. You will be required to execute a copy of the enclosed certification under penalty of perjury at the closing. If you do not plan on attending the closing, please be sure that your attorney or agent delivers the fully completed and executed copy of the affidavit along with the deed. The closing attorney for the firm can not and will not provide information, advice or opinions regarding the Act’s applicability to you or to this transaction.
12. NEW FEDERAL TAX LAWS. Since January 1, 1986, Federal Law requires the closing attorney to report the proceeds of the transaction to the Internal Revenue Service. Consequently, when you complete the attached form, be sure to include your Social Security or Federal Identification Number.
13. TITLE EXAMINATION. Please note that if, as the result of searching the title or obtaining the plot plan and municipal lien certificate, we discover that there are any deficiencies or defects, they are your responsibility to correct or to have your attorney do so on your behalf or determine your rights, duties and obligations under your purchase and sale agreement.
14. CLOSING. You should also be aware that most lenders require 72 hours notice in advance of the day of closing to prepare the loan papers and to obtain the funds. When applicable, there is no exception to this requirement, and it is therefore incumbent upon you to coordinate scheduling of the passing not only with our office but with the buyers and brokers as well.
15. IF YOU ARE SELLING PROPERTY IN THE CITY OF BOSTON (OTHER THAN A CONDOMINIUM UNIT), FINAL WATER READINGS ARE REQUIRED: Due to experience with the Boston Water and Sewer Commission, we have been forced to require a final water reading for all closings pertaining to property in the City of Boston.
A final water reading must be ordered by you from the Water and Sewer Commission (980 Harrison Avenue, Boston, MA 02119, fax (617) 989-7710). It takes approximately two (2) weeks to get the final reading. Please note that a water bill, even a water bill received on the day of the closing, is not sufficient, as the Boston Water and Sewer Commission is far behind on its billings. Contact the Water and Sewer Commission if you have any questions.
16. CORPORATIONS: If you hold title to the property in a corporate name you should immediately take steps to secure the following documents:
1) A Certificate of Legal Existence from the Secretary of State;
2) A certificate from the Clerk of the corporation attesting to the adoption of a vote by the Board of Directors, authorizing certain officers to sell the property and to execute the deeds and all related documents therefore;
3) A similar certificate from the Clerk of the corporation attesting to the adoption of a vote by the holders of at least two-thirds (2/3rds) of the voting stock of such corporations, said vote to authorize the sale of the property by certain officers; (see M.G.L. Chapter 156B, Section 75) and
4) A waiver of the corporate excise tax lien imposed by the Commonwealth of Massachusetts Department of Revenue under M.G.L. Chapter 62C, Section 51.
PLEASE FOLLOW THESE INSTRUCTIONS VERY CAREFULLY. IT IS YOUR RESPONSIBILITY TO SEE THAT THE ABOVE REQUIREMENTS ARE MET TO AVOID DELAY, INCONVENIENCE AND UNNECESSARY EXPENSE TO YOU.
Very truly yours,
William E. Heney
Attorney at Law
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