While some states allow title companies to conduct closings on homes, closings in North Carolina must be conducted by a real estate attorney. Along with the attorney, the buyer, seller, their attorneys, real estate brokers, and a settlement agent may be included in the process.
Who is involved in the closing?
While some states allow title companies to conduct closings on homes, closings in North Carolina must be conducted by a real estate attorney. Along with the attorney, the buyer, seller, their attorneys, real estate brokers, and a settlement agent may be included in the process.
Steps of the Closing Process:
1. Offer to Purchase Contract
To begin the process, the buyer makes an offer on the seller’s home. After reviewing the offer with their real estate agent and attorney, the seller may decide to accept the offer. The seller may also decide to negotiate and return a counteroffer or completely reject the offer. Once the offer has been accepted, the sales contract is signed by both parties and deposits on the house are delivered to an escrow agent. These deposits include a due diligence deposit and an earnest money deposit and are usually non-refundable – unless the seller breaches the sales contract. This deposit is then credited to the buyers upon the end of the closing process,
2. Property Inspections and Surveys
Many offer to purchase contracts include contingencies, or requirements that the home must undergo inspections prior to the closing. These property inspections can include pest inspections as well. The purchase contract will usually state the deadlines for when the inspections are due, as well as any repairs requested by the buyer. However, it is important to note that not all repairs are required to be fixed. The seller is not obligated to fix anything unless expressly stated in the purchase contract.
3. Disclosures
In North Carolina, the seller is required to create a disclosure for the buyer. In the disclosure, the seller should identify all material facts and any major defects that could affect the buyer’s decision to purchase the property. This document should be detailed and include a report of the home’s condition and the systems within the home. The home should also go through the appraisal process to determine its market value.
The property should also be surveyed prior to the closing. These surveys take place after the appraisal and inspection processes have been conducted. Completing a survey on the home ensures that both parties understand what is included in the property. It also identifies any easements or encroachments that run with the land.
4. Title Inspection and Insurance
Real estate attorneys will conduct title searches to make sure that title is clear at the time of the transfer. The search consists of public records, including deeds mortgages, liens, wills, and other settlements that would affect the property’s title. During this process, attorneys may acquire title insurance for buyers. The insurance agent confirms debts owed against the home. Along with insurance, the buyer goes through the process of switching utilities into their name and other preparations before ownership is transferred.
5. The Closing Meeting
The final closing meeting is usually held at the office of the buyer’s attorney. The parties come together to finalize the purchase, hand over payment, and sign closing documents. The seller’s attorney is responsible for preparing the deed for the sale. Both parties should have signed the deed prior to the meeting. Other prorated expenses like taxes, interest, and HOA fees are calculated. The closing attorney confirms the buyer’s payment and the seller transfers ownership to the buyer. After the closing meeting, the new deed is recorded at the Register of Deed’s office and the purchase is complete.
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