Topsail Island Real Estate Blog
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Buying Process 101 – Together We Are A Winning Team
North Carolina Closing Practices
Buying a house can be an exciting adventure, but if you do not know the process; it can also be a daunting and scary road ahead. If you’re considering buying a property in North Carolina and have either never purchased a property before, or this would be your first time purchasing in NC, then read on – there are some helpful tips!
The Home Search
Everyone thinks that the first step in searching for a home is just that – searching. Well, not so fast. While advances in technology help today’s buyers navigate the real estate market a little bit more independently; you still have to start at your bottom dollar. Literally. You need to speak with a lender to see how much you can afford. Now, this is not as scary as you might think. You’re not sitting down with someone to have them grill you about all of your financial shortcomings or where you’re hiding your money. It could be as simple as filling out an online application, following up with a lender on the phone or via email – and you’re all set! With stricter lending practices and changes in banking regulations, you may not know how much or little you can actually afford. Not to mention, there may be loan products out there to help you qualify even if you thought you wouldn’t. Once you have an idea of what your price range should be, you can narrow your focus to what you can afford, then to what you actually want to spend. Now, keep in mind when you’re choosing your lender, he or she will need to be licensed to write loans in the state that you are buying your home. A lender in Ohio may not be able to help you with your loan here in NC. I understand that it’s difficult to do such personal business with someone you may have never met, but I assure you that our team works closely with reliable and dependable lenders that we are happy to recommend. Even if your lender is licensed in the state of North Carolina does not mean they understand all of the practices here either. For instance, a lender in Raleigh may not consider the fact that you may require flood insurance. Or that coastal counties (any county that has land touching the coast) require a Wind and Hail policy. This is especially important when looking at condos, as only a very small number of lenders are approved to facilitate such transactions. Why is all of this important to you? When you’re in the final days of packing and moving; you don’t want to worry that your lender remembered to have all of these items in order so that you can close on time and not have to stay in the motel down the street, instead of your sweet new beach house.
Offers and Escrow
Now that you have your lender secured (or a few that you can choose from) and you have a home that you just can’t live without; the next step is, of course, the offer! How exciting! Once you and the seller have come to an agreement, you can toast to your new digs at the coast. And, then comes the real work. In North Carolina, we have what is called a Due Diligence Period within this offer. This is something that is still somewhat new to us North Carolinians, so if you purchased a house even just three years ago, you may not know what this is. So, pay attention! The Due Diligence Period is the period within which you (the buyer) will perform the necessary inspections (general inspection, pest, maybe even a survey) as well as secure all of your lending needs to ensure that not only you qualify for your loan, but the house qualifies for the lender. This process will include you sending all of the necessary documentation to your lender, the lender ordering and approving the appraisal and the underwriters at the bank approving you and your loan. When you receive your inspection summary from the inspector, you will likely go over it with your Realtor and decide if you need/want certain repairs or if maybe a monetary concession on the purchase price is in order. Or, if you’re lucky – it comes back squeaky clean! If during this Due Diligence Period your lender finds that this is not the house for you, or the inspections results are awful or you just decide that you don’t like the name of the road, you may back out with no consequences. You will, of course, lose your Due Diligence deposit if you put one down, but the Earnest Money will be returned to you. If you and your lender decide that this is still “the one,” and once all negotiations are done, you will proceed past this date and wait for the lenders to work their magic and for repairs (if any) to be made and pack your boxes! A day before closing, you will likely have a “walk through” of the property to ensure that all repairs are satisfactory and you are buying the product you intended to buy.
Closing or Settlement
From the time your offer was made into a contract, your Realtor was likely already on the ball in getting these documents over to an attorney’s office to facilitate the closing. That’s right – in North Carolina, we don’t utilize Title Companies or anything else – we are an Attorney State with regard to Real Estate. In fact, there are specifically “Real Estate Attorney” practices that handle these. They pull the title work to ensure that you are purchasing a property that is free of encumbrances (a fancy term for liens and such), they prepare the deeds, communicate with your lender regarding closing costs and fees so that you only have to make ONE check out at closing, they provide a venue for you to attend the “closing,” in order to sign all of the papers that the lender requires, as well as the deed and they even record the deed for you at the courthouse to officially make the home yours. Once the lender has funded your loan and the attorney has recorded at the courthouse – you get your keys! It’s a thing of beauty, really!
Owning Your New Home
That’s all on you, buddy!
Actually, while we are Realtors and our job is to find you a house; we take our roles very seriously and are always here for you, even after you close. If there is ever anything you need from recommendations for a painter or great restaurant to a pet sitter or baby sitter – we’re here for you!