General Overview of the
Real Estate Process in North Carolina
A. The Agreement
An "Offer to Purchase Contract" is completed with a broker’s assistance, signed by the Buyer and may be accompanied by an earnest money deposit, traditionally 1-2% of the sales price. Using the current “Due Diligence” contract, the earnest money is often deferred until the end of the due diligence period since the buyer has the right to withdraw from the contract for any reason during the due diligence period. Since the buyer has the right to withdraw, the seller most likely will require the buyer to pay a non-refundable due diligence fee for that right. Earnest money deposits are held until closing in a non-interest bearing legally approved trust account, and both the earnest money and the due diligence fee are credited toward the purchase price at closing.
During the Due Diligence Period, the buyer is expected to obtain all of the information necessary to make an informed decision about purchasing the property, including obtaining an inspection, negotiating inspection results, securing a loan, getting an appraisal, a survey, insurance, examining covenants and home owner association documents, and obtaining all other information possible.
Most buyers will find it helpful to visit with a mortgage lender prior to beginning their house search in order to understand the loan process and to find out what amount they are qualified to borrow. Even though there is no such thing as a guaranteed loan approval, the lender needs to make the buyer confident that the loan will be there at closing. The deadline for obtaining this degree of confidence is the end of the Due Diligence Period. Lenders are required to furnish written estimates of all loan costs as well as other closing costs.
Sound advice from our mortgage professionals can help you get the best house for your money. Berkshire Hathaway HomeServices Carolinas Realty, partnering with HomeServices Lending, offers an exciting and wide range of loan products to make the entire process of buying your home as easy and affordable as possible. Before you start shopping for a home, our mortgage professionals can help you:
- Learn more about how much you can spend
- Decide what type of mortgage will best suit your needs
- Stay up-to-date on current mortgage rates
C. Closing (Transfer of Title)
A typical real estate transaction will usually span 30 to 60 days and conclude with a closing. The closing process has several parts. The most prominent part is the “settlement conference” which is normally held at the office of the buyer’s attorney. In North Carolina, closings are conducted by attorneys and not title companies. At the settlement conference, all papers are signed and down payments are made. Items that need to be pro-rated, such as taxes and loan interest, are computed to this date.
After the settlement conference is conclude, the closing attorney must verify that the loan funds and other cash have been received, pay all outstanding liens, and record the necessary deeds and deeds of trust. Once the deed is recorded, the buyer can receive the keys and take possession of the property. Prior to the closing the buyer is advised to arrange for the conversion of all utilities.