If you are thinking about – or are already in the process of – purchasing a home in North Carolina, you will need to engage a real estate attorney to assist you with the closing of the sale. More than assisting with the closing, a real estate attorney works with you every step of the way to ensure a smooth transaction and make sure the home you purchase is free and clear of any encumbrances.

Here, we discuss the various responsibilities of a real estate attorney during a real estate purchase or sale in North Carolina.

Why Hire a Real Estate Attorney?

You may think you can save a dollar or two by foregoing this step. However, hiring an experienced real estate attorney is vital – particularly if you are a first-time buyer. In North Carolina, many of the services and steps required to close a real estate transaction are considered to be “the practice of law,” which means they must be done by an attorney licensed to practice law in the State. While non-lawyers can assist with various stages of a closing, to complete a real estate closing in North Carolina, a real estate attorney must be hired. As you will see, a real estate attorney has many responsibilities, and you will be happy to have engaged one early in the process to ensure the best outcome.

Preparation of Legal Documentation

First and foremost, your North Carolina real estate attorney will assist with the preparation and negotiation of any legal documents required in connection with the purchase of a home. For example, a real estate attorney may draft the sales contract, deed to the property, and mortgage note, and negotiate with lenders on your behalf.

Title Search

Once you have a fully executed sales contract, a real estate attorney will order a title search, which seeks to identify any lingering encumbrances on the property; deeds of trust, judgments, past-due taxes, and any other claims on or liens against the property can hamper the process and cause substantial legal issues down the road. As such, your attorney will work to identify any issues that can interfere with your home ownership and ensure that the seller can properly, legally, pass the title to you. If your real estate attorney does find any discrepancies in the title, he or she will bring these to your attention. Together, you will decide how to proceed.

Opinion of Title

North Carolina requires a mechanism known as an opinion of title. This is a document submitted to the property’s title insurance company. The opinion is based on the title search and discloses information such as the owner of the property, information on taxes, whether there are any liens or judgments against the property, who has access to the property, and if there are any easements or restrictive covenants. Only a licensed real estate attorney can provide an opinion of title, so a real estate attorney’s role in the transaction is especially important during this step.

Based on the opinion of title, the title company will issue an item called a “binder,” which will be provided to the lender. If the lender does not object to the opinion of title as expressed in the binder, the transaction will continue to the final step: the closing.

Closing Facilitation

Once the lender signs off on the title binder, the loan documents are sent to the closing firm for settlement. A real estate attorney will facilitate the closing of the loan and the transfer of ownership to the buyer. On the day of the closing, the parties – the buyer, seller, and real estate agents involved – will meet at the attorney’s office, where the attorney will walk them through each document, explaining each one as the parties execute them. Typically, the buyer and seller do not need to both be present at the same time.

The attorney will typically start with the closing statement (an ALTA settlement statement or HUD-1) to explain the settlement costs and ensure that the various costs and credits are correct. Then, the attorney will review the loan documents, in detail, with the buyer, and review the deed documents to ensure all property information is recorded correctly and free of typos.

Once all parties have executed the documents, the real estate attorney will send copies of the loan documents to the lender. He or she will record the deed and deed of trust with the Register of Deeds office, disburse the proceeds, make any payments (such as commissions to any real estate agents involved in the transaction and fees to lenders), and set up any escrow accounts.

Final Title Opinion

Ultimately, a real estate attorney will issue a final title opinion and title insurance premium to the title company. After receiving this information, the title company will issue the final title policy and send it to the buyer and the lender.

Once all steps are completed, you can take possession of your new home.

We Are Here to Assist With All of Your Real Estate Transaction Needs

In North Carolina, a real estate attorney is not only an essential piece of the puzzle when closing a real estate transaction, but a required one. Only attorneys who meet specific requirements can legally handle these closings. Our experienced real estate attorneys meet those requirements and are here to ensure that your transaction goes according to plan. At Green Mistretta Law, we are committed to delivering the best possible results for our clients and take pride in offering superior legal counsel. Give us a call or reach out to us online to learn more.

This article does not establish an attorney-client relationship and must not be construed as legal advice.