From Contract to Closing - What are the Steps in NC?
Steps in Purchasing a NC Property in NC.
The Buying Process:
I found the right property and I am ready to buy!
Here is a brief description of the steps you go through in NC in purchasing a home or property. I know you may be familiar with buying in in your own state, but rules differ for each state. Glance through and glean any information that will be helpful knowledge in understanding the buying process in NC.
• We found the right Property to fit your needs. That is our goal.
• We Write the Offer to Purchase contract. Seems like a lot of paperwork but it helps everyone to understand the terms.
• Time to negotiate the offer. The buyer always hopes there is lots of negotiating room. However a seller may have various reasons for selling: health, change of job, finances change, you want a bigger property, or it is time to move on due to getting older. Every seller’s need change and the amount of negotiation relates to the reason for selling.
• Once the price is agreed upon, the process speeds up.
These are the important dates to keep track of once you have a written contract.
• Effective date of the contract : This is the final date when both parties have signed and initialed any changes.
• 5 days to wire the Earnest Money Deposit…. These are calendar days, not business days. If you are wiring your earnest money deposit you will need to wire a couple of days early if wiring from an investment account. It just seems to take longer as it goes through more channels.
• Due Diligence Period: the amount of time allotted is negotiable and depends on how easy you can get your inspections ordered and completed. Usually 3 to 4 weeks is allowed for this. If it is a bank property it can be as little as 10 days. All inspections are completed during this time, if one is getting a loan the loan process is started and the buyer will know if he is okayed for a loan.
• Inspection Dates: These are completed during the due diligence period. In NC the buyer pays for the inspections unless negotiated differently in the contract. Possible inspections: Pest, Home, Radon, Water, Survey, Septic, Structural engineer
• Due Diligence Date. This date is the FINAL date when a buyer can cancel his contract and still get his earnest Money Deposit Returned. The seller’s agent must be notified in writing than they will notify their seller by 5PM on the due diligence date. If it is after 5PM, the buyer will not automatically get his earnest money returned. Time is of the Essence!
• The Closing Date: After the deed to the property is recorded at the court house, Congratulations! You have a new mountain property.
Here are a few more details of our NC various processes.
The Attorney handles anything legal from the beginning to the closing. You wire your earnest money deposit to them within the five days after the contract is signed. They will in turn sign the last page of the contract acknowledging that the money was received. We will then forward this page to you for your file. They will send you an introductory letter introducing themselves.
They also do the title work. The seller’s attorney prepares the deed. If at any time you have a question, it is always good to check with them. Real estate agents can not give legal advice. They are very helpful and it is nice to know someone in the area if you ever need legal work of some kind. If you are doing a loan, they will work with the lender to handle the information. It is important that we know early if you will be in town or not for the closing. If not, the documents must be prepared early to be a mail away so keep us posted on that. If you have any legal questions, the attorneys always are there with answers.
Loan Documents: If you are getting a loan, gather all your financial data. You may need a suitcase. Not really but it seems like they want everything but your kitchen sink. Assemble these documents as quickly as possible as it seems the loan process can take 45-60 days so the sooner they get all your documents the sooner they can get started.
The seller should ask for a letter of preapproval, so it is good to know if you are preapproved. In addition to wasting your valuable time looking at homes, it is not fun to look at property you cannot afford to buy
The Due Diligence Period: All inspections are done during this period. Loan approval is also received during this time. If for some reason things do not work, you must notify the seller in writing prior to 5 pm of the due diligence date in order to get your earnest money returned if you are not going through with your contract. Surveys, appraisals, inspections, checking over covenants if there is a home owner’s association and getting preapproved all need to be done during the due diligence time.
The Inspections: these need to be all done during due diligence. A buyer can have as many inspections as they want or feel they need.
After the home inspection takes place, you will receive a notice in your email to check out the inspector’s website. Here you will find a list of any issues that the inspector finds. As well as each one that has a problem it is documented by photos.
After you have checked them over, feel free to call the inspector with questions. If the home has any issues, It is then time to decide if you want the seller to repair anything. If you do wish for repairs, there is a document (Due Diligence Repair Request form) that we fill in to request these be made. The seller does not have to agree, but most often do depending on the circumstances. If there are issues to be handled, the seller can hire repair people or a dollar value can be decided upon and the buyer will handle the repairs after closing.
The radon test takes 2 days so extra time is allowed for this. Any number less than 4.0 Picos the state says is acceptable. Any number 4.0 or great, there needs to be remediation.
The pest inspector will have his report to you as well.
Surveys are always recommended. If you want it filed at the county, we will need to ask for a Mylar copy. Filing it at closing is always the best. We need to notify the surveyor as early as possible as with all the inspectors as their schedules are busy. If you do not do a current survey, the title insurance is only insuring that the title is free and clear.
We need to notify the attorney if you have paid for the invoices or if there has not been time for a check to be mailed, they will be paid for at closing. Most inspectors prefer that you pay when the service is completed.
If a home inspector finds that there are issues, then an additional inspector may be needed such as a roofer.
Appraisals: These are required if there is a loan; but it is always a good idea to get an appraisal. If one is paying cash, it is not required.
Insurance: This is always good to get lined up early on. We can request to see who the present owner uses. Or you might want to see if your own home owner’s insurance will handle the insurance.
Utilities: Electric, water, gas, TV, internet, alarm (if the home has one)…Our utility companies make it easy for you. You can do this by phone and is usually done during the prior week of closing just to make sure the closing date is correct and has not be moved. We will supply the numbers to call. The seller will call first and tell them they are selling the property and give them the date the property closes. You will then call and give them your information. It is that easy. As far as TV. Depending on the area, many use DIRECTV or Dish. Some have cable access it just depends on the area. Plan in advance so you can have them come if you are going to be here. The TV or cable companies require the seller to return their boxes, so you will be receiving new ones. The satellite dish stays, but the receivers inside the home do not.
Closing: Finally, the day is here. You are not required to be at closing. It usually passes quickly. You will receive a HUD statement from the attorney in an email. This is an accounting sheet that explains the money transactions at closing. Taxes and any home owner’s association fees are prorated at closing. If you have a loan, those figures will be there, attorney fees, title insurance, Any item that will pertain to the closing of the property. If you are in town for the closing, you can sign your HUD statement and have any money wired in earlier. If you will not be in town, they will fax the statement to you, you will check it over, sign, date and return it and wire funds if needed. After the attorney has gone to the court house and filed the deed, the property is now YOURS! We can now give you the keys and it is time to start enjoying your new home!!!
• In the state of NC most expenses are handled by the buyer, while if you are in Florida, the seller handles most of the expenses. It varies from state to state. In some cases the seller will pay for part of the expenses but this would need to be negotiated at the time when the contract is written.
• Taxes and home owner’s fees if any will be prorated between both the seller and the buyer.
• Buyer is responsible for all the inspections that they request: home, pest, radon, survey, water test, septic, engineering or any other inspection or test the buyer may want to do.
• Buyer is responsible for any of his loan costs unless it is cash or unless it is stipulated in the contract otherwise
• Buyer and Seller each pay for their own attorney and any mailing costs if it is a mail away.
• Buyer pays for the title inspection and title insurance and filing of the deed
• Seller pays for the deed preparation and the stamp tax when filing at the court house.
That was a whirlwind tour from beginning to end. If you have questions, please ask. We are always here to answer them. We like things to go smoothly for you so never be afraid a question. No question is too small to ask. If you have questions, Just Ask.