Closings are always somewhat scary especially if you are a first-time homebuyer. There are various things to complete in your checklist before you can get to that finish line and without a trusted team to work with you, things can take longer or even stagnate.
Your first step is to work with a team of trusted professionals. You will need a real estate agent who is familiar with the neighborhood and the current market to help you find the best home suited for you and your family’s needs. Another integral part of the team would be your mortgage officer who will help determine your financing options prior to you making an offer and of course, a closing attorney. Now keep in mind, many realtors are will refer you to their trusted mortgage officers and attorneys so you may not have to look for them on your own. This is helpful to you so you don’t have to spend more time searching for these people and you can just meet their referrals to have a sit-down and get to know them. Also, they have worked together on countless transactions so you can be assured that they will be working to get you the best possible deals. If you happen to personally know a mortgage officer or attorney who you would like to represent you, then it’s fine but make sure you tell your realtor immediately.
The Offer to Purchase and Contract is your starting point. It is a document that you will send to the seller to indicate your terms of purchase. It is important to remember that in North Carolina, a contract for the purchase or sale of real estate must be in writing in order to be valid. Make sure that you review this together with your realtor and attorney because once it is accepted by the seller, it controls all of the important terms of the purchase.
A key part of the contract is setting up an appropriate time for a home inspection. There are two inspections that you will need. One is the termite and moisture inspection and the other one is a personal inspection. You have to make sure that the contract has ample time to complete the inspections and be able to terminate the contract if an estimated repair exceeds a certain amount of dollars.
Once an offer is made, the seller can either accept or reject the offer. It is important to understand that if the seller accepts the offer in its entirety, then the contract has been made and that you move forward with the process. However, if the seller rejects any part of the offer, whether that be the purchase price, time of closing, or other contingencies, then any counteroffer made back to the buyer (even if it is very close to the original offer) must be accepted by the buyer to create a binding contract. The terms of the contract typically control the last date by which closing can occur, although a buyer and a seller can enter into a written agreement for extension of this time period if something delays closing such as repairs based off an inspection.
The first thing that needs to be done after an offer is accepted is for the buyer to make an earnest money deposit. The North Carolina Good Funds and Settlement Act states that an earnest payment must be paid by the buyer to show the seller an intent to purchase. These fund are placed in an escrow account. Under the law, no settlement agent can disburse these funds to the seller until the paperwork has been verified and the closing is completed.
When an offer has been made and accepted, your closing attorney will need to be notified so that a title search can be performed. In a title search the closing attorney will make sure that the sellers are capable of delivering clear title to the property. If there are any title issues discovered, then you have the option to give the seller additional time to correct the title issue (if possible), or the contract may be terminated if the seller is not able to correct any title deficiency before the date set for closing. It is also recommended that you have a survey performed to ensure that there are no encroachments onto the property.
In North Carolina, it is required that the buyer and seller use a real estate attorney. This is called attorney supervised closing. The attorney will draft all of the necessary closing documents necessary for the buyer to purchase the property. The responsibilities of the supervising attorney closing include:
• Performing a comprehensive title search
• Prepare a deed for the sellers
• Title insurance acquisitions
• Handles the closing contract
In addition, the attorney and real estate agent will contact the lender in order to make sure that the closing process is handled within the proper time frame.
At closing the seller will deliver to the closing attorney an executed deed and several other necessary closing documents. If you are financing through a bank, you will sign all the necessary bank paperwork to reflect the loan you are receiving, together with a deed of trust granting the bank a security interest in the home. The time frame from start to finish mostly depends on the bank process, as some banks have a long waiting period and others are able to process things more quickly. Provided that there are no title issues a typical closing happens within 30-60 days of the final acceptance of the offer.
In North Carolina, expect that you will be needing your driver’s license at closing not to mention, be ready to sign 10-40 documents. A common misconception during closing is that buyers think they will be getting their keys at the closing table. Before that happens though, the deed has to be recorded first in North Carolina before you can get your keys. This may take 2-4 hours or in some cases, it may take a day. You can talk to your realtor to settle for a morning closing so that you can come back in the afternoon to get your keys for your new home.
Buying a home is one of the largest investments and most important milestone of your life so it is best that you know what you will be dealing with during this entire process. Most importantly, you need to have a realtor you can trust! Kim Mathis and Associates pride themselves with years of professionalism and expertise in handling real estate transactions in North Carolina. Call us today to start paving your way to a seamless journey towards homeownership.