The exact process of a real estate transaction can vary across the U.S. and remains dependent on the county.
01
PAYMENT OPTIONS
Normally, a loan/mortgage is required unless you have cash upfront to pay for the home in full. This allows the home purchasing process to become easier and puts less stress on your bank account. A loan allows you to maintain your finances and maintain your normal daily expenses while still comfortably paying your mortgage payment.
02
THE OFFER TO PURCHASE CONTRACT
A real estate agent will generally provide the buyer with a standard forms provided by the NC Association of Realtors.
03
HOME INSPECTIONS
Inspections almost often take place after the contract is accepted by all parties during the real estate transaction. The cost of inspections is typically paid by the buyer.
04
CONTINGENCIES
Virtually every contract includes at least one or a couple contingencies, and sometimes several. Either party can back out without injury or financial penalty, except for the real estate transaction fee and/or earnest money outside of the transaction window if buyers fault. They can cover a description of private items to remain in the home or to be removed, and clarification of appraisal contingencies. Contingencies are removed or lifted as each one is met by prescribed deadlines or by closing date. Many other contingencies, such as buyer possession before closing and seller-financing, are also typically included in a special addendum to the offer.
05
RESIDENTIAL PROPERTY DISCLOSURE & MINERAL OIL RIGHTS
North Carolina law requires that most sellers furnish a residential property disclosure to buyers, describing the condition of all systems in the home. Disclosures should cover certain material facts and major defects. As well as soil and mineral right and who own them or if the land is defective at all.
06
BOUNDARY SURVEYS
Buyers in some regions, especially rural areas, usually pay for surveys. Most local lenders don't require surveys.
OTHER STEPS IN THE CLOSING PROCESS
TYPICAL BUYER EXPENSES
Some expenses of closing are commonly paid for by the buyer, including:
- Home/Termite/Radon inspections
- Surveys as well as checking soil and mineral rights
- Yearly property taxes, HOA dues, Insurance 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, if applicable.
- 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
TYPICAL SELLER EXPENSES
- Tax stamps, an excise tax based on sales price
- Prorated share of property taxes, property association dues, other similar fees
- Real estate commission if agents or a broker is involved
- Fees associated with loan payoff or transferring funds into a checking account
- Any costs the seller agrees to pay for or share with the buyer
OTHER STEPS IN THE CLOSING PROCESS
TYPICAL BUYER EXPENSES
Some expenses of closing are commonly paid for by the buyer, including:
- Home/Termite/Radon inspections
- Surveys as well as checking soil and mineral rights
- Yearly property taxes, HOA dues, Insurance 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, if applicable.
- 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
TYPICAL SELLER EXPENSES
- Tax stamps, an excise tax based on sales price
- Prorated share of property taxes, property association dues, other similar fees
- Real estate commission if agents or a broker is involved
- Fees associated with loan payoff or transferring funds into a checking account
- Any costs the seller agrees to pay for or share with the buyer
A Typical Step-by-Step Path to Closing
Pre-Approval
Buyer get pre-approved, then makes an offer.Negotiation
Real estate agents facilitate negotiations, if necessaryOffer / Counter Offer
Seller accepts the offer or issues a counter to the buyer, which may then be accepted.Due Diligence
Buyer's due diligence money is given to seller via check and earnest money, also known as the good faith deposit, is placed in the listing broker's escrow account.Appraisal
The lender orders an appraisal and must be completed within the transaction period.Home Inspection
Inspections are ordered and must be completed within the transaction period.Repair Requests
Any repair requests are negotiated with the seller, but sellers do not have to comply.Termite & Radon Inspection
A termite & Radon inspection is ordered and must be completed within the transaction period.Surveys
Surveys are ordered after a successful appraisal and inspections. Buyers don't want to invest too much into the property until they're sure it will close.Insurance
The buyer applies for hazard insurance and the information goes to the lender and the closing attorney.Switch Utilities
Buyers arrange for the utilities to be switched over to their names as the closing date nears.Closing
Closing takes place at the office of the buyer's attorney. The seller's attorney has forwarded signed deeds to the buyer's attorney. Closing is normally handled or overseen by an escrow/settlement agent, who is generally an attorney or a representative of the title company.Certified Funds
The buyer gives their attorney certified funds to pay for closing and signs the loan papers and other required documents.New Deed
The buyer's attorney records the new deed at the courthouse.Closing Costs
The escrow/settlement agent will disburse the funds to pay off any existing mortgage or other liens and cover all closing costs. The agent will then provide the balance of the funds to the seller.Keys!
Keys are provided to the buyer!Normally, you'll cover these expenses:
This is the money to keep the home off the market. You will have to pay the seller a non-refundable amount of $300-1000 for the due diligence period (Normally around $500-600). During this period you will pay about $500 for a home inspection, $75 for a termite report, and $500 for an appraisal.
You will negotiate repairs if need be, verify the home appraises for the purchase price and if not negotiate an appraisal price to have your loan approved for your required amount.
Once you go under contract you will need to send a wire/check to cover the amount of the earnest money shown on your purchase contract to your escrow agent who is usually your attorney. The amount of earnest money varies, depending on the purchase price of the house and your initial offer, but it is generally about 1% of the purchase price.
If you do not buy the house for any reason, fund are returned during the transaction period, but if that period ends and you then decide to back out you forfeit the earnest money. If you do buy the house, the transaction fee and earnest money is credited towards your closing costs and down payment at closing.
This is normally a minimum of 3% to 5%. Many first-time home buyers have not been able to save enough money to use for a down payment. So for this reason, USDA, VA, and FHA loans appeal to first-time buyers because they require no money or very little money for a down payment.
The costs associated generally run from $4,000 to $9,000. Hint: Experiment with a Mortgage Calculators or ask one of my lenders to see the costs you might incur. Please call us. My lenders want to help you and can offer free advice on improving your credit, a free analysis of your financial health. We have years of real estate experience & we know the communities we serve.
If you want to learn more about mortgages, click the Mortgage Tab above to be introduced to loan process and trusted lenders.
Use our free mortgage calculator to easily estimate your monthly payment.
See which type of mortgage is right for you and how much house you can afford.
Considerations When Buying A Home
Get to know the local community. Many things impact the price of a home.
