More Closing Profiles
The Sales Contract: The majority of residential sales contracts are written by real estate agents using standard forms provided by the North Carolina Association of Realtors. The forms were developed by attorneys and are in a "fill in the blanks" format.
Home Inspections & Other Contingencies:
Inspections normally take place after the contract is accepted by all parties. Contingencies for home inspections and pest inspections are part of the main body of the contract. Dates are inserted to indicate when buyers will complete them. Other standard contingencies and descriptions include financing provisions, a description of items to remain in the home (or be removed), clarification of association dues, etc.
Inspections are typically paid for by the buyer.
Property Disclosure: North Carolina law requires that most sellers furnish a residential property disclosure that describes the condition of all systems in the home.
Surveys: Buyers usually pay for surveys. Most banks do not require that buyers have a survey, but as agents we always recommend them.
Attorneys do title searches for buyers, purchase title insurance for them, and handle the closing process.
Attorneys and real estate agents work closely with lenders to coordinate closing and make sure everything that's required is being handled.
Attorneys prepare deeds for sellers.
Buyers and sellers contract with the attorney of their choice. Sometimes it's the same attorney, sometimes not.
At Closing, Sellers Typically Pay For:
Their own deed prep (attorney fee)
Tax stamps, an excise tax associated with the sale
Their prorated share of: property taxes, property association dues, and other similar fees
Real estate commission if an agency is involved
Fees associated with loan payoff or transferring funds into a checking account (overnight fees, electronic fund transfer)
At (or prior to) Closing, Buyers Typically Pay For:
All home inspections
Their share of yearly property taxes, property association dues, and other similar annual fees
Fees for a title search and duties performed by their attorney, title insurance policy, hazard insurance for a year, downpayment and lender fees, flood zone certification fees
Payments to begin escrow accounts for property taxes and insurance that will be paid by lender the following year
Typical Progression When Agents Are Involved:
- Buyer makes offer, seller accepts (that sure sounds easier than it actually is!). The buyer should be pre-approved by a lender.
- Buyer's earnest money (downpayment, good-faith deposit) is placed in the listing agency's trust fund.
- Lender orders appraisal (buyer or agent might order an appraisal if it's a cash deal).
- All home inspections are ordered after an acceptable appraisal is received. (If time is a factor, and we're confident the home will appraise, inspections can be done earlier).
- Repair issues are negotiated with the seller if necessary.
- Termite inspection is ordered (but must be done within 30 days of closing--for an iffy contract we delay it).
- Surveys are ordered as quickly as possible after a successful appraisal--timing depends on the workload in each area, but buyers don't want to invest too much into the property until they are sure it's a go.
- Buyer begins to shop for hazard insurance and the information goes to the lender and closing attorney.
- Nearing closing date, buyer arranges for utilities to be switched over.
- Closing takes place at the office of the buyer's attorney. The seller's attorney, if different, has already forwarded signed deeds to the closing attorney.
- Buyer gives attorney certified funds to pay for closing; signs loan papers or other required documents.
- Attorney records new deed at the courthouse and disperses funds: seller's proceeds, seller's payoff of mortgage, real estate agency commissions, surveyor fees, home inspector fees, tax payments, etc.
That's a typical progression to closing in my part of Western North Carolina, but there are of course variations.