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Back September 11, 2019

North Carolina Home Buying Process and the Types of Deeds You Can Get

NC Real Estate Purchase Process and Types of Deeds

You finally found that perfect dream home that you’ve been searching for years. Your realtor submitted an offer to purchase and after a few days of negotiation, your final counteroffer was accepted by the seller. Next, depending on where you’re located within the state of North Carolina, the seller may request Due Diligence money in addition to the Earnest Money Deposit.

Due Diligence is generally requested in busier markets to compensate the seller for removing his property from the market. As such, this is the type of deposit that will never be returned if the deal falls through, as it’s meant to compensate the seller for losing an opportunity to sell his/her property to someone else while it was removed from the market. In an event the deal goes through, however, Due Diligence fee is deducted from the final purchase price.

Earnest Money Deposit (EMD), on the other hand, is typically much larger than the Due Diligence fee (1 to 2% of the purchase price), and is meant to show the seller that the buyer is “in earnest” about moving forward with the purchase. Unlike the Due Diligence fee, the buyer may get the EMD back if the buyer backs out of the deal within the Due Diligence Period, which generally lasts for 17 days, but may be negotiated/extended by your real estate agent. The said 17-day Due Diligence period is the most crucial time during the entire transaction, as that is when the buyer must, among other things:

order an inspection of the property and subsequently negotiate any repairs with the seller, if any;order appraisal of the property and ensure that it’s returned at or near the purchase price, as any difference between the purchase price and appraised value must be covered by the necessary financing after the appraisal comes back.research about zoning and governmental regulations, insurance, review of documents, etc..

In other words, Due Diligence period is the period during which a prospective buyer must take all reasonable steps and conduct a comprehensive inspection in order to determine whether or not to purchase the property. Make sure to ask your real estate agent to further explain to you the importance of this time sensitive period.

Fast forward a few weeks, Due Diligence period has ended, you secured financing from your lender, and all of the requisite documents were sent by your lender to your closing attorney, whom the buyer typically chooses. The closing attorney will then perform a title search and ensure that the seller actually has rights in the property that he or she is selling and that there are no liens, or judgments against the seller or the property. After the search is completed, granted the title was returned without any encumbrances, your attorney will get title insurance or commitment that will protect your interest in the acquired property. Next, the closing attorney will draft a deed, which is an instrument that transfers ownership of real property from the seller to the buyer. In North Carolina, there are three most common types of deeds:

General Warranty Deeds – makes greatest number of warranties against all defects and encumbrances in title even the ones created prior to the sale; excluding those specifically excepted in the deed itself;

Limited Warranty Deed – also warrants against defects in title, but grantor’s (seller’s) warranties are limited to only that the grantor has not done anything to lessen the value off the property while he/she owned it; and,

Non-Warranty Deeds or Quitclaim Deeds – conveys whatever interest grantor owns without any promises even relating to ownership of the property.


The best type of deed that you should always ask for in North Carolina is the General Warranty Deed, in which the seller covenants to the buyer that:

Covenant of Seisin – the seller owns the real estate property at question.

Covenant of right to convey – the seller covenants that he or she has the right to convey, that is – there are no disabilities or temporary restraints on alienation.

Covenant against encumbrances – there are no known encumbrances against the real estate other than those listed in the deed. An encumbrance is anything that would burden the title such as an easement, judgment, or a mortgage. Note, the seller has the right to satisfy outstanding mortgages with the proceeds of the sale.

Covenant of warranty – the seller will defend the title to the real estate against the claims of all persons; and

Other warranties that can be further clarified by your closing attorney.


Unlike in General Warranty Deed, in a Limited Warranty Deed the seller usually only gives two warranties:

The seller has not done anything personally to the tile that the seller received. As such, it is a very limited type of warranty that you should avoid.The seller also warrants that he/she will defend the title to the property against the claims based only on the prior actions of the seller (within the period that he/she owned it), but no one else.


As the title implies, in a Non-Warranty Deed also known as a Quitclaim Deed, the seller gives absolutely no warranties. Therefore, you should avoid this type of warranty at all cost. In a Non-Warranty or Quitclaim Deed, the seller merely gives the buyer whatever rights, if any, that the seller has in the property without making any warranties whatsoever.

Finally, the closing day is here. It is always the most joyous occasion, as that is when your long and tiring journey finally ends. If everything went smoothly, then all that typically should happen during closing is a signing of dozens of forms required by the lender in order to get clearance and receive funding for the purchase. After the funds have been wired, and the deed has been recorded, the attorney will disburse the remaining funds in accordance with the closing disclosure that you signed. By now you should have received the keys to your new house and should be all ready to move in. Congratulations!

Should you have any further questions about the real estate process in the state of North Carolina or South Carolina, please contact Panchenko Law, PLLC. Our firm has offices located in North Carolina (Matthews, Charlotte and surrounding areas) and in South Carolina (Greenville, Spartanburg and surrounding areas). Call our Charlotte and Matthews Real Estate Closing Attorneys for a Consultation so that we can better assist you and advise you with respect to any of your Real Estate issues. This blog post is not to be construed as legal advice.

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