Why do I need an attorney for my closing?
Conducting a real estate closing is considered to be the practice of law in North Carolina. Only attorneys licensed in the state of North Carolina can legally close a real estate transaction and give legal advice throughout the process. Closing a real estate transaction encompasses many different services, culminating in the meeting at the closing table to sign the final documentation.
What information do you need from me?
We need a fully executed copy of the Offer to Purchase and Contract as soon as possible in order to begin processing your closing. Once this is received, we will forward a buyer’s information sheet to you or your Realtor. Fill this sheet out and return to us as quickly as possible in order to ensure a smooth transaction. Other requests for information may follow as the transaction proceeds and it is very important that the requested information is promptly given to our office. Delays in receiving this information may delay your closing.
What is a survey and why should I get one?
A survey is a rendering of your property. A licensed surveyor will go out to your property and mark the boundaries of your property with stakes and flags. The surveyor will then draw a rendering of your property indicating the shape and size of the property as well as any encroachments, easements and setbacks.
Lenders used to require a survey for almost every closing. Now, the buyer is usually left with the choice of whether to purchase a survey or not. The survey usually costs around $300, but may vary depending on the size of the lot. It is always a good idea to purchase a survey; otherwise, at closing you accept the property as it is with little recourse against the seller if there is a defect with respect to matters of survey.
In the alternative, you can ask if the seller has a copy of a previous survey on the property. You can usually look at the property and determine if any changes have been made to the property since that survey was made. Be careful to look at the neighbors’ property as well since they may have constructed a fence or building on their lot that encroaches upon the property that you are purchasing.
What do I need to bring to closing?
You will need to bring your spouse if you are married. All parties must bring a drivers license. Any funds needed for closing must be in the form of a certified check or money order made payable to our trust account. Funds may also be wired into our account. We will notify you prior to closing if your lender makes any additional requests for items (we won’t usually know of any additional requests prior to receiving the closing package).
Can I look at my closing documents prior to the scheduled closing time?
Yes. We prepare the settlement statement once we receive the loan documents from your lender. Once we have the loan package complete, we will make a copy of those documents for you to keep after the closing. You can pick this up in advance from our front desk if you call and request that this be available to you. Please keep in mind that we can only have this available if we have received the loan package from your lender. Any delays on the part of the lender will delay this availability to you.
Does the seller need to attend the closing?
Not necessarily. The seller may sign the deed, lien waiver and tax documentation in advance. The seller’s Realtor may sign the settlement statement for them at the closing. However, in some instances (FHA loans), the seller may be required to sign items in the buyer’s loan package. In this instance, the seller either has to be available or have previously given the Realtor power of attorney to sign such documents. We can draft a power of attorney for the seller for an additional fee.
When will the proceeds from the closing be available?
We are required to record the deed and deed of trust at the register of deeds office prior to disbursing any funds from the closing. We must receive all funds before we can record. When funds are wired from the buyer’s lender, it may be late afternoon before these funds are received even if your closing took place in the morning. We will keep you informed of any delays in recording and advise you as to when your proceeds may be picked up. We can also wire or overnight your proceeds for an additional fee.
I sold my house in July, why am I receiving a tax bill for that property in September?
Taxes are billed to the record owner as of January 1st of that year. The tax bill that comes out in late summer is for the current year (January through December). If the tax bill wasn’t out at the time of your closing, your taxes should have been prorated on your settlement statement to accurately reflect the amounts due from each party. The buyer should have been credited with the amount allocated to the seller, thus making the entire bill the responsibility of the buyer when the bill does come out. If the buyer has an escrow account, the tax bill will be paid from that escrow account. If the buyer does not have an escrow account, then the buyer will be responsible for paying the full amount when due.
If the taxes are not paid by January 6th of the following year (Ex – 2005 taxes must be paid by January 6, 2006), then collection proceedings will commence against the current owner and the former owner of the property (since the bill is issued in the name of the former owner). The taxes are ultimately the responsibility of the new owner in this case, but may cause some headache to the prior owner.
What if my closing doesn’t occur by the date indicated on my Offer to Purchase and Contract?
If you included the phrase, “time is of the essence”, then this is a technical breach of contract by the party delaying the closing. Legal action may commence to enforce the terms of the contract. Our office does not pursue breach of contract actions; therefore you must hire independent counsel to pursue this action.
If this phrase was not used, so long as the parties are working in good faith to close the transaction, the courts have ruled that the contract is still viable for a reasonable period of time after the specified closing date.
What is a Settlement Statement or HUD1?
The Settlement Statement or HUD1 is a document that summarizes all of the money associated with the transaction. Any amounts paid to the buyer, seller or third parties in connection with the transaction should be reported on the settlement statement. Any fees not reported on the settlement statement or money that changes hands between the buyer and seller and is not reported on the settlement statement, may violate federal law. Please advise your attorney of any and all money that has changed hands in connection to your closing whether paid in advance or at the closing table.
