Why do Attorneys Conduct Real Estate Closings in North Carolina?

Closing on a house or a mortgage loan involves a myriad of legal issues and potential pitfalls. Issues often arise involving contract interpretation, inspection and repair negotiations and legal interpretations regarding title and survey issues. In addition, in North Carolina title insurance can be issued only upon the legal opinion of a licensed attorney. For these and other reasons, real estate closings in our state have traditionally been the domain of real estate lawyers.

Should I have a Survey?

A Survey of the property conducted by a Registered Land Surveyor is strongly recommended in order to uncover problems such as encroachments, restrictive covenant setback violations, boundary disputes, deed gaps and overlaps, etc., before you buy. It should be considered an integral part of our title examination and your due diligence investigation of the property. Although it may indeed be a prudent investment, unless it is a specific requirement of your lender, the decision to invest in a survey is yours. Please let us know as soon as possible whether or not you wish us to arrange for the survey to be conducted. The cost of the survey will typically be added to your closing statement and be paid at closing.

What is “Title Insurance”?

Title Insurance is a policy of insurance that protects you against defects in the title to your property, such as encroachments, property line disputes, lack of legal access, previously undisclosed easements that impact the value of your property, and a host of other potentially costly matters. It is issued based on the Opinion of Title issued by your closing attorney based on his or her title research in preparation for the closing. If there is a mortgage loan included in your closing, Title Insurance will be a requirement of your Lender. Even if you are paying cash for your home, it is highly recommended that you purchase Title Insurance to protect your investment.

What do I need to do to prepare for Closing?

First, you should pay close attention to the instructions given by your Realtor and requests made by your Lender. In addition, we will send you an engagement letter outlining our process of preparation for the closing, and any information we need from you as well as any documentation that you need to bring to the closing with you. Being prompt in providing all requested information is key to keeping all the processes moving that ultimately enable us to conduct a smooth and seamless closing transaction for you.

How must I bring my funds to Closing?

We will make every effort to have your closing statement prepared for your review prior to closing. Funds brought to closing go into our Real Estate Trust Account. North Carolina State Bar regulations require that funds deposited into attorney trust accounts for disbursement in connection with real estate closings be “guaranteed funds.” Because of this requirement, you must arrange for a Certified Check or a Wire Transfer of the funds. Your Closing Attorney or his staff will provide more detailed information regarding this requirement.

Does my spouse need to come to the Closing, and for that matter, do I?

Except in very limited circumstances, the answer to whether your spouse needs to come to closing is a resounding YES. Even if only one spouse is going to be the Borrower on the loan, there are a number of documents that must be signed by the non-borrowing spouse. Examples of these documents are closing statements, truth-in-lending disclosure statements, and the Deed of Trust securing the Promissory Note. With the approval of your Lender, your spouse may give you Power of Attorney to sign on his or her behalf at the closing.

If neither you nor your spouse can or wish to come to closing and there is someone local who can sign on your behalf, both can give Power of Attorney to the third party to sign the documents on your behalf. This must be approved by your Lender in advance, and the Power of Attorney must be limited and specific to the transaction.

Contact Bagwell Holt Smith Jones & Crowson, P.A for more information.