• We represent the buyer in the matter of ensuring the acquisition of good and marketable title to the property. We can also advise on legal questions concerning title to the property, title insurance and the covenants and conditions of the loan documents. In the event of a dispute between the buyer and mortgage lender, we will not attempt to represent either party. We represent the mortgage lender to the extent of assuring full compliance with its loan closing instructions. We typically do not advise the buyer with respect to the terms of the buyer’s loan (i.e. loan amount, interest rate, conditions for later conversion or refinancing, necessity or amount of mortgage insurance). Buyers should obtain from the lender the closing instructions or other documentation stating the final loan terms and resolve any issues, disagreements or disputes concerning the terms of the loan before closing. In the event of a dispute between the buyer and mortgage lender, we also are not permitted to undertake representation of either party, but we will facilitate communication with the lender at closing if necessary. 

• Secondarily, in representing the Lender with respect to compliance with their closing instructions, this is not considered to be a conflict of interest by reason of the fact that we have not been engaged in negotiation of the loan terms nor do we have any discretion regarding the lender's documentation. The documentation must be completed precisely as required by the Loan Instructions. Therefore, we may not vary the instructions in such a way that would be either beneficial or negative to the buyer’s interests.  Additionally, if found out that a buyer was committing loan fraud, we may be required to disclose this to the Lender, and would then not be allowed to continue with the representation of the buyer. An example would be if you were purchasing the property as an investment but have indicated to the Lender that this is your primary residence. 

• We may be called upon to prepare a deed from the seller. It is assumed that the basic terms of the sale transaction have been agreed upon between the seller and the buyer and that we have no obligation to bargain for either. The North Carolina State Bar stated in ethics opinion 2004 FEO 10 that an Attorney “may prepare the deed as an accommodation to the needs of her client, the buyer, without becoming the lawyer for Seller,” and that certain disclosures must be made to the Seller before doing so. Any representation of the Seller under these circumstances is very narrow and limited. Unless they hire their own attorney, the Seller(s) have no legal representation in the process of the closing. We cannot give legal advice to the Seller, other than that they should seek their own legal counsel, if necessary. 

Normally, we will update from the prior owner’s title insurance policy which affords a reduced rate on the title insurance. This means that our title examination would begin with the date and time of issuance of that policy, and we will not certify the status of the title to the property prior to that date. While defects in the title occurring prior to our search period would not be reported by us if we update, these should be covered by the existing title policy, so you should receive the same title insurance coverage as if we had conducted a full title examination. This enables us to conduct the title examination more expeditiously, and it should not expose you to any increased liability. It is our responsibility to see that you get clear title to the property in question, free of liens and encumbrances. PLEASE BE AWARE that matters of zoning and environmental hazards are not included in a standard title examination. Zoning laws affect permitted uses of property and the location of improvements thereon, among other things. Environmental hazards include, but are not limited to, the existence of radon gas, lead-based paint, underground storage tanks, asbestos and whether your property is in a flood hazard area.

TITLE INSURANCE: We will obtain a policy of owner’s title insurance in your favor and a lender’s policy of insurance in favor of the lender. You will be required to pay the title insurance premium. We will do our best to obtain the policies at the rate most favorable to you. You have the right to select the title insurance company; and pursuant to North Carolina General Statutes Chapter 58 and Section 75-17 and applicable sections of the Department of Housing and Urban Development Regulations contained in RESPA, the lender or Realtor may not require you to use a particular title insurance company or agency as a condition of the contract or loan approval. There is also enhanced title insurance coverage available. For instance, a typical policy would not cover you against encroachments built by a neighbor after the date of the policy or survey coverage for certain risks if you don’t have a survey. This policy typically costs 20% more than the standard policy and would only be ordered if you request it. Please contact me if you need more information or would like to request this policy.

• If you are buying an existing home, you typically have the right to and should have the home inspected by a licensed home inspector. Please be sure to have all inspections completed prior to the end of the due diligence period of the Offer to Purchase and Contract. Thereafter, be sure the Seller is making the repairs to which you have agreed. Begin this repair review process as soon before closing as possible in order that closing not be delayed by issues related to lacking or improper repairs.

• If the residence is new construction, the Sellers should furnish you with a soil treatment guarantee at or prior to closing. Otherwise, the mortgage lender will require that the improvements on the property be inspected by a licensed exterminator and a termite report prepared and submitted prior to closing. Normally, the mortgage lender will not fund the loan until it has received and reviewed this report. You or your Realtor should order the report and see that it is delivered to us and the lender as soon as possible, and no later than five (5) days prior to closing so that we will have an opportunity to review it and resolve any issues which may arise therefrom.

We recommend that a new survey be obtained to determine among other matters, if the property is located in a flood zone (thus possibly requiring flood insurance), if any closure errors, minimum square footage violations or property line encroachments exist or if the improvements on the property violate any set-back requirements stated in the restrictive covenants or on any recorded map of the property. Your lender may indicate that it does not require a survey. Nonetheless, your lender still may be protected against issues related to surveys under its title insurance policy, while you may not have such protection. Without a new survey, your title insurance policy in most instances will not provide you with coverage against issues related to a survey (even though your lender may be protected). In addition, without a survey, you may be unaware of any potential issues until you sell your home- at which time it may be too late to effectively remedy the problem.

Your lender requires that the improvements on the property be insured against flood, fire and other casualties with a reputable company and that insurance must be in place as of the date and time of closing. You should order the hazard insurance policy and see that it is delivered or faxed to us and your mortgage lender as soon as possible, but no later than five (5) days prior to closing. Your lender needs this information before finalizing your loan documents.

Homeowners Associations are not a matter of public record. We attempt to determine if one exists and, if so, obtain necessary information to prorate the dues. However, it is advisable that you or your real estate agent also contact the association as we do not become involved in various compliance procedures of the several management companies relating to transfer of their records to your name. Likewise, you should routinely arrange for transfer of electrical service, telephone, and municipal utilities.

You will receive copies of your loan documents and title commitment. If there are additional documents you need copies of, we are happy to provide them to you. Please keep in mind that we intend to destroy your file seven years after the closing date. If you have any problems with this, please let us know in writing and we will come to a mutually agreeable arrangement.

It is becoming slowly more common to hold property in a trust by which to more easily transfer property to another outside of probate upon passing or the happening of another event. This can be done for a primary residence, investment property or vacation homes. We can assist in drafting a trust by which to transfer your property into that contains the details of its use, costs, maintenance, etc. Then we can also prepare the deed for transfer.