I am an attorney practicing law in South Carolina and most of my practice (at least for now) is real estate closings. Most of these closings are residential and many of those closings are for first time home buyers. Unless someone is involved in “real estate” as an attorney, real estate agent or loan professional or investor, he or she is not going to know the ins and outs of a real estate transaction. Therefore, I totally agree that for a South Carolina property, an attorney needs to a real estate closing.

South Carolina vs. Buyer’s Service, 292, SC 426, 357 SE 2d 15, 17 established the four requirements that an attorney do in conducting a closing, supervision or actual.

1. Do the title search on the land,
2. Review and/or prepare the documents to convey title and the loan documents (notes, deeds and mortgages as examples)
3. Explain to the parties the significance of the documents, make sure the signer understands them and make sure they are executed correctly;
4. Record the documents at the respective deeds office.

In Doe Law Firm vs. Richardson and McMaster (Lawyers USA No. 9934428, 2006), the Court also added that the attorney must supervise the disbursement of money of a real estate closing, the buyer’s down payment and the loan money.

If anyone other than an attorney does these things, he is guilty of the unauthorized practice of law and can go to prison for five years. I will admit that I was skeptical of this when I studied the Buyer’s case in my first year law school property class. I attended law school out of state and told the professor after that class that I thought it was a “scam” to have the lawyers have a monopoly on closings and she agreed. Having now practiced for the last six plus years under the rule, I think it is an excellent idea, for the protection of the public. These are the reasons why.

1. The lawyer is accountable. He must make sure that he gets the payoffs for the seller’s mortgages, makes sure that the title is clean, everyone gets his money and that everything is handled after closing, including recording of deeds and mortgages and satisfaction of mortgages. The lawyer verifies the identity of the parties. If the lawyer messes up, he will hear from his liability insurance carrier or from the Discipline Committee of the South Carolina Supreme Court.

Neither are fun conversations.

1. The parties know what they are doing. A former boss of mine said, “You must master the documents and what they say.” Documents of a closing are almost always the same. The attorney must convey to the parties the significance of the documents. The parties have the chance to ask questions. No one leaves my closing table no knowing what they signed. “What does this 15 page mortgage say? You pay and you stay; if you stray, you’re going away.”
2. The lawyer looks out for everybody. The lawyer is not an advocate of any party usually as he always is in Court. Therefore, the lawyer helps everyone with the closing to make sure that this is what they want to do. For example in a re-finance, the lawyer makes sure that the mortgage broker is not violating any predatory lending laws. The borrower understands that they have three days to cancel the loan in a re-finance. In states where attorneys do not have to do closings, this extra safety net for the consumer is not there.
3. Less ambulance chasers! This is a joke, but it makes the point. I make a good living putting people together and doing deals. I am here to help people when they buy or sell a home or take out a home loan. It is good that South Carolina requires a lawyer to be the gatekeeper of the real estate transaction.