Five Important Things for The Buyer to Know
By: Ryan C. Hawkins
An Attorney must conduct your closing. A person who is not licensed to practice law in North Carolina and is not working under the direct supervision of an active member of the State Bar may not perform functions or services that constitute the practice of law. The North Carolina State Bar Association has provided a list of examples of what constitutes the practice of law in Authorized Practice Advisory Opinion 2002-1. But in regards to real estate the practice of law involves: The exercise of legal judgment; the preparation of legal documents such as deeds, deeds of trust, and title opinions; the explanation or interpretation of legal documents in circumstances that require the exercise of legal judgment; the provision of legal advice or opinions; and the performance of other services that constitute the practice of law.
State licensed home inspectors should be used to determine the condition of the property. Even if the buyer is a “do it yourselfer”, leave the building inspection to an expert. If the buyer misses a serious defect, who is going to pay for it? Under North Carolina law it usually won’t be the seller.
The earnest money deposit is not the only thing the seller will get if the buyer breaches. It is a common misconception that the buyer can refuse to close and will only “lose the deposit money”. In addition to the deposit money, the seller can sue for other breach of contract damages including “loss of bargain”, expenses in reselling the house, interest on the mortgage while waiting to resell, etc.
Choosing the lender is important. It can be a mistake to select a lender or a mortgage broker who is not located in North Carolina. When you get to the closing and this lender is still not ready (and perhaps never will be), who are you going to see when the lender is in California or New York? It makes good sense to use local lenders and mortgage brokers. You can always go to their office and get results.
Communication is the key. For a smooth closing your lender should send the “closing package” to the attorney prior to the day of the closing. In order for that to happen, the buyer must stay in constant contact with the lender to monitor the lender’s progress. Communication with the lender and the law office is crucial. The buyer should not choose a closing attorney simply because he charges a few dollars less. A smooth closing is worth more than a few dollars and depends mainly on the staff at the law office. Check out the “law office” staff and make sure there is a good staff of real estate paralegals in the law office before scheduling your closing.
Ryan C. Hawkins is a partner at Ferguson, Hayes, Hawkins & DeMay, PLLC and a member of the Real Property Section of the North Carolina Bar Association.