Serving Raleigh, NC and Surrounding Areas
919-789-9884 Phone 919-789-8746 Fax
The following information is meant solely to provide general information about the closing process and should not, in any way, be construed as legal advice.
Please consult an attorney about your specific set of circumstances.
Kilpatrick Gudeman provides educational materials and presentations about real estate closings in Triangle-area new home buyers seminars. This is a summary of those materials.
In North Carolina, soon after you have finalized the contract to purchase real estate - your new home or business property - it will be time to hire an attorney and schedule a date and time for the closing. Attorneys' fees widely vary, so it is a good idea to get quotes on fees from a few offices. The services the attorney provides, however, are primarily the same:
The attorney prepares and reviews the paperwork necessary to secure the mortgage, including ordering a survey, when necessary.
The attorney does the title search and renders an opinion of title that tells you that the Seller owns all of what you want to buy, without hidden encumbrances, assessments, and/or liens on the property. The attorney also orders title insurance to protect the buyer and the lender from any flaws in title that may later surface.
The attorney often prepares the deed, when the Seller doesn't have an attorney, and pays-off the Seller's loans from the settlement as an accommodation to the Buyer.
The attorney records the deed and mortgage (in NC called a deed of trust) at the county Register of Deed's office where the property is located and then disburses the funds from the closing.
* for a refinance or home equity loan that requires a closing, the attorney's work is the same except that there is no need to prepare and record a deed.
Much of the information the attorney will need will be obtained from the realtors, when there are realtors involved. This includes getting a termite report and arranging for hazard insurance.
If you are buying the property jointly, your attorney will discuss with you what kind of ownership you want the property held in.
The big day arrives!
Most closings occur at the attorney's offices, however some attorneys, like Kilpatrick Gudeman, will conduct the closing (with prior arrangement) at the realtor's office, builder's office, and some lender's offices. Because several people will attend the closing, it is usually held in a conference room.
Some of the documents you sign will be notarized, and for this you will need a picture ID.
The largest part of the closing is the explanation and signing of all the documents. If you want to read each document meticulously, please make your attorney aware so that they may arrange some time prior to the closing for you to review the documents. An average closing takes about an hour.
Among the documents that you will sign is the Closing Disclosure. This form is required by federal law and itemizes all services provided and the accompanying charges. It is created by the attorney and is signed at closing. It should reflect all fees, set-offs, etc. and in the correct amount.
Another document required by federal law is the Truth-in-Lending (TIL) statement. Your lender provides this and must do so within three days of your initial application. This is the initial TIL. It shows the APR, which reflects the cost of your mortgage at a yearly rate and includes any points, fees, and other credit costs. It is usually higher than the interest rate stated on your mortgage because of these additional costs. The statement also shows terms, finance charge, amount financed, and total payments required. If the actual APR differs by more than a small amount, the lender is required to give you a corrected TIL no later than, and usually at, the settlement. This is the final TIL.
You will sign a Note which is the legal "IOU", promising to pay the lender back based on the terms to which you've agreed. It will include penalty information for late payments, or otherwise violating the terms of the note.
The mortgage or deed of trust is the legal document which secures the note and gives the lender a claim against your house if you violate its terms. It should be understood that the lender is a part owner even though you have possession. This document usually states your responsibilities in making your payments, in keeping hazard insurance and in adequately maintaining the property. Legally, you convey title to a third party, the trustee, to be held until the loan is paid.
The Seller brings the deed to the closing which transfers ownership to you once it has been properly signed, notarized and recorded in the county registry of deeds.
There are also many other documents in connection with the loan that you will sign, some of which may be affidavits stating i.e. your intended use of the property.
The deed and deed of trust will be recorded usually within the next business day making the transfer of ownership official. The attorney cannot disburse funds until after the recording.
Please feel free to call us with any questions you may have at 919-789-9884.
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