Helpful Real Estate Information

Who Real Estate Agents Represent

When buying or selling real property, you may find it helpful to obtain the assistance of a real estate agent. Real estate agents (brokers and salespersons) are licensed and regulated by the North Carolina Real Estate Commission.

In today's real estate market, agents can choose to work with you in many ways. You may choose to work with one who will represent only you. Or one who will represent only the other party in the transaction. Or an agent who represents both you and the other party (parties).

If you choose to have an agent represent you, the agent must promote your best interests. Your agent must also be loyal to you and follow your lawful instructions; exercise reasonable skill, care and diligence; account for all funds he handles for you; and disclose any information to you which could influence your decision in the transaction.

Before a real estate agent can represent you, the agent must have you sign a written "agency agreement" - typically a "listing contract", "buyer agency contract", or "dual agency contract." Real estate agents must disclose to all parties involved who they represent.

A General Overview of the Real Estate Process in North Carolina

A. The Agreement

• An "Offer to Purchase Contract" is completed with a sales associate's assistance, signed by the Buyer and is accompanied by an earnest money deposit of usually 3-5% of the purchase price. When the offer is accepted, these funds are placed in a non-interest bearing account by the listing broker until closing. Then the earnest money is credited to the buyer on the closing statement.
• Usual contingencies in the contract: obtaining a mortgage commitment, termite inspection, component inspection.
• The seller agrees to convey the property by General Warranty Deed.
• The average time to closing (transfer of title) is 30-60 days for an existing home.
• The contract is accepted and signed by the seller.

B. Mortgage

• The buyer submits a mortgage application to a mortgage company, or other lending institution.
• The Lender orders a credit report, and if satisfactory, orders an appraisal of the property.
• Having verified the Buyer's employment, the Lender approves the Buyer's credit and the value of the property as collateral for the loan.
• The Lender approves the mortgage application and sends documentation to the Buyer's attorney for closing. The Lender orders mortgage insurance if mortgage insurance is necessary.

C. Closing (Transfer of Title)

• The buyer's attorney orders title insurance and begins computation of closing statement and preparation of other necessary documentation.
• Utility companies need to be notified when title transfers so the appropriate parties can be billed.
• Closing is typically held at the office of the Buyer's attorney.
  • The usual closing costs include: loan origination fee (1% of the loan amount), discount points, if applicable, private mortgage insurance if the loan is greater than 80% loan to value, title examination and insurance, hazard insurance, credit report, survey, recording fees, and appraisal.
  • The closing attorney completes the final statement, and records the documents at the County Courthouse.
  • The Buyer or Buyers take title as "Tenant by the Entirety."
  • The Buyer typically takes possession immediately after the closing