The laws pertaining to Real Estate transactions not only vary across the United States, but also have distinct differences in some jurisdictions within the state of North Carolina. As such, there is no uniform checklist that could adequately prepare buyers and sellers for executing their real estate transactions. Therefore, we strongly encourage you to consider hiring Biazzo & Panchenko Law, PLLC to ensure that your interests are adequately represented. The following is a brief overview of the closing process in North Carolina.
Generally, buyer’s agent will commence a residential real estate transaction by drafting a sales contract – known as an offer. This is, however, not a cause for concern because buyer’s agent merely fills in the blanks of a standardized purchase contract form that is drafted by attorneys, and approved by the North Carolina State Bar. Moreover, seller’s agent thereafter reviews the offer and communicates the terms thereof to the seller. The seller may accept the offer, reject the offer, or create a counteroffer.
An offer is accepted only if the terms of acceptance do not contradict or vary the offer itself. Any changes to the offer phrased as a statement (not a question) will be considered as a counteroffer – which is essentially a rejection of the buyer’s initial offer. Furthermore, a conditional acceptance is not an acceptance at all. Lastly, any communication regarding the offer and acceptance should be in writing in order to avoid any subsequent litigation, which is often times caused by simple miscommunication between the agents.
Once an offer is accepted by the seller, and a contract is signed by both parties – the contract enters an executory stage. In North Carolina, the executory stage is also known as the Due Diligence period – during which a buyer can walk away from the deal for any reason whatsoever. In addition to a Deposit or Earnest Money that is generally held by attorney or broker, a Due Diligence fee is paid directly to the seller as compensation for seller taking the property off the market and potentially losing an opportunity to sell it to someone else. If the buyer walks away from the deal during the Due Diligence stage, s/he will lose the Due Diligence fee, but not the Earnest Money.
Due Diligence is the time for the buyer to secure financing, conduct property inspections, surveys, appraisals, and other research in order to ensure s/he wants to proceed with the deal. Any defects that surface during the Due Diligence period, which were not disclosed by the seller on the property disclosure can be used by the buyer to renegotiate the purchase price. Generally, the seller will either reduce the selling price or agree to cure the defects in order to complete the sale, but is not required to do so.
After the contract is signed, buyer’s agent will send the purchase contract to the closing attorney, who will commence the closing process (discussed below in step 4). Sellers must keep in mind that a real estate closing attorney primarily represents the interests of the buyer in a real estate transaction. This is so because the buyer is the one who selects the closing attorney in order to ensure that the property is clear of any and all encumbrances, and that the seller has the right to convey the property.
While buyers generally choose a closing attorney, sellers rarely hire their own attorneys, because all that the closing attorney needs to do for the seller is prepare customary seller documents such as the deed, and then disburse the proceeds from the sale. Moreover, once an attorney represents both sides s/he has an ethical obligation to close the deal to the best of his/her abilities. Therefore, there’s no reason for the seller to shop around for a second closing attorney, because this will only delay the closing and potentially create miscommunication.
Upon receipt of the purchase contract, attorney will commence the closing process by performing a title search of the property at the local register of deeds. The results are then sent to a title company that issues a title policy. Next, attorney and real estate agents will work together with lenders to coordinate the closing and resolve any issues in a timely manner. A few days prior to closing, attorney will request lien payoff amounts, prepare all requisite documents and subsequently record the same after they are signed by both parties.
At the closing, which generally takes place at the office off the buyer’s attorney, seller will sign the deed over to the buyer and give the buyer the keys in exchange for the buyer paying the remaining funds. Once all necessary documents are recorded, attorney will disburse the funds and payoff all the liens.
We strongly encourage you to seek the advice of a licensed North Carolina Real Estate Attorney if you are conducting any real estate transactions. To schedule a consultation today, contact Biazzo & Panchenko Law, PLLC. This blog is not to be construed as legal advice.