Real Estate Closing Process in North Carolina

Homebuying steps from contract to closing

Row houses in Charlotte, NC
••• Getty Images/Nivek Neslo

Real estate transactions vary across the United States, so there's no one list of "typical" steps that can be used to prepare buyers and sellers for the progression from contract to closing.

Below is a look at how closings work in North Carolina. Generally, attorneys do title searches and acquire title insurance for North Carolina homebuyers, but some closing steps vary among different North Carolina jurisdictions.

Offer to Purchase Contract

The majority of residential sales contracts are presented to sellers by real estate agents who use the standard forms provided by the North Carolina Association of Realtors. These "fill in the blanks" forms were developed by attorneys and comply with state laws. Homebuyers sometimes ask their attorneys to draft offers for them.

Home Inspections and Contingencies

Home inspections normally take place after the contract is accepted by all parties. Inspections are typically paid for by the buyer.

Contingencies for basic home inspections and pest inspections are part of the main body of the contract. Dates are inserted to indicate when buyers will complete inspections and when requests for repairs, if any, will be sent to the seller.

Contract contingencies for some types of inspections, such as those for septic systems and radon levels, are added by including a special addendum with the offer. The same is true for many other contingencies, such as appraisal requirements, buyer possession before closing, and seller-financing.

Other standard contingencies include financing provisions, a description of items to remain in the home (or to be removed), and clarification of association dues.

Residential Property Disclosure

North Carolina law requires that most sellers furnish a residential property disclosure that describes the condition of all systems in the home. Questions will address certain material facts, major defects, and numerous disclosures.

Boundary Surveys

Buyers in some regions, especially rural areas, usually pay for surveys, but sometimes ask the seller to share in the cost. Most local lenders do not require surveys.

More Items That Are Completed in the Closing Process

  • Attorneys do title searches, acquire title insurance for buyers, and handle the closing transaction.
  • Attorneys and real estate agents work with lenders to coordinate the closing, making sure everything is handled on time.
  • Attorneys prepare deeds for sellers.
  • Buyers and sellers hire their attorneys of choice. Homebuyers and sellers should work with different attorneys so that each party has representation should a problem requiring negotiation arise.

List of Typical Homebuyer Expenses

  • Home inspections, almost always.
  • Surveys, which can be expensive.
  • A share of yearly property taxes, property association dues, and other similar fees prorated to the closing date.
  • Attorney fees for a title search.
  • Fees for title insurance policies, hazard insurance for a year, down payment and lender fees, flood zone certification fees.
  • Fee to record the new deed.
  • Funds to open lender escrow accounts for property taxes and insurance that will be paid by lender the following year.

List of Typical Seller Expenses

  • Attorney fee for deed preparation.
  • Tax stamps, an excise tax based on sales price.
  • Prorated share of: property taxes, property association dues, other similar fees.
  • Real estate commission if a broker is involved.
  • Fees associated with loan payoff or transferring funds into a checking account.
  • Any costs seller agrees to share with the buyer.

A Typical Step-by-Step Path to Closing

  1. Buyer makes offer.
  2. Real estate agents facilitate any negotiations.
  3. Seller accepts the offer or issues a counter to the buyer, which may then be accepted.
  4. Buyer's earnest money, also known as the good-faith deposit, is placed in the listing broker's escrow account.
  5. Lender orders appraisal.
  6. Inspections are ordered after an acceptable appraisal is received.
  7. Any repair requests are negotiated with the seller, but sellers do not need to comply.
  8. Termite inspection is ordered – it must be completed within 30 days of closing.
  1. Surveys are ordered after a successful appraisal and inspections – buyers don't want to invest too much into the property until they are sure it's a go and will close.
  2. Buyer applies for hazard insurance and the information goes to the lender and closing attorney.
  3. As closing date nears, buyers arrange for the utilities to be switched over to their names.
  4. Closing takes place at the office of the buyer's attorney. The seller's attorney has forwarded signed deeds to the buyer's attorney.
  5. Buyer gives attorney certified funds to pay for closing and signs loan papers and other required documents.
  1. Buyer's attorney records new deed at the courthouse and disperses funds that are due to all parties.

The Closing Process in Other Areas

Transactions in your state might differ a great deal. Talk to a local real estate agent to get your state's specifics.