Real Estate Closing Information

Please review all the steps below so that you are familiar with our closing process, and, if you have not already done so, please submit the Buyer or Seller Info Form (as applicable) ASAP so we can begin work on your closing.


J&M Basic process for a standard residential real estate closing
  • J&M may assist buyer with preparation of the offer to purchase for submittal to seller. (if requested).
  • Both parties sign the offer to purchase and J&M receives signed document from agent or buyer.
  • J&M sends an email notification to buyer requesting buyer to fill out J&M’s Buyer Information Form.
  • Buyer submits the Buyer Information form to J&M either online, by email or fax.
  • J&M begins working on the title work for the closing and submits title work to buyer’s lender and
    coordinates closing with the lender.
  • Buyer conducts due diligence by arranging for survey, home inspection, pest inspection & other
    inspections as necessary.  Buyer also makes arrangements for appropriate insurance policies.
  • J&M receives bank documents from the lender and works with lender to approve final closing disclosure.
  • Lender provides closing disclosure to Buyer and sends final closing docs to J&M.
  • Buyer & Seller sign the closing documents.
  • Buyer delivers money for closing to  J&M via wire transfer.  ALWAYS CALL J&M BEFORE WIRING MONEY FOR CLOSING TO VERIFY WIRING INSTRUCTIONS!!
  • J&M submits signed documents to lender for approval.
  • Lender approves signed documents and wires loan money to J&M
  • J&M receives approval and loan money from lender.
  • J&M updates the title examination.
  • J&M records the deed at the Register of Deeds (Title officially changes hands at this point).
  • J&M sends proceeds to Seller & Buyer can receive the keys and move in.
  • Contact all utilities to transfer them into your name.  (J&M does not contact utilities!!)

MORE DETAILS ON PROCESS

  1. Negotiate Contract- Buyer makes an offer to the seller.  In drafting the offer the buyer should pay particular attention to the due diligence period, personal property being conveyed with real estate, closing date and contingencies such as financing or sale of current residence.

2. Due diligence.  During this period the buyer is responsible for conducting all appropriate inspections examination of the property, including without limitation, a survey, a home inspection, pest inspection, soil inspection, etc. as the particular property may warrant.  NC is a buyer beware state, so in general, the seller is under no obligation to provide any specific information about the condition of the property.  Also, during the due diligence period the buyer should be securing a commitment from his/her lender to insure that they will have sufficient funds available at closing to purchase the property.

3. Title exam.  J&M will conduct your title examination and provide a commitment for a title insurance policy.  See Closing Information for more information on title exam & title insurance.

4. Set a closing date.  This date may or may not be the date set forth in the contract depending on whether “Time is of the Essence” for the settlement date in the contract.  Under most contracts, the buyer and seller have 14 days after the settlement date listed in the contract to complete the closing.  The closing date will often depend on when your lender has completed the underwriting process and delivered your loan documents to J&M.

5. Sign your documents.  The signing can be done either at J&M office or via email or overnight delivery.  Once the documents are signed and returned to J&M.

6. Fund the loan.  Buyer and lender provide money to J&M for closing.

7. Title update.  J&M needs to re-check public records to make sure no new liens have attached to the property since the date of the initial title examination.

8. Recording the deed & deed of trust.  After updating title, J&M will record the deed at the register of deeds at which point title to the property has changed hands.

9. Seller receives proceeds and buyer receives keys.

10. Buyer contacts all appropriate utility companies to switch utilities into the Buyer’s name.  Johnson & Moore does not contact utility companies on behalf of Buyer unless specifically requested to do so

What do I, the Buyer, need to do after signing the contract to make sure my closing goes well?
  • Review J&M Basic Closing Process Above
  • Review all details on this page
  • Submit Buyer Information Form to J&M.
  • Submit documents to your lender for underwriting.
  • Order your survey & inspections as appropriate and contact the Clubs at St. James for golf membership application and information (if applicable) .See Area Information for local providers.
  • Review survey and inspections when they come in to make sure they are acceptable.
  • Call J&M with questions/concerns (ANYTIME!)
  • Keep in touch with your lender to make sure the lender does not need something from you.
  • Wait for J&M to call and schedule your closing. (approximately a week before your scheduled closing).
  • Sign your documents at closing.
  • Wait for J&M to record deed.
  • Get keys and move in!
Due Diligence

Please review your contract and note the date that your due diligence period expire.  This date is vitally important because before that date you can terminate the contract for any reason or no reason, but after that date it becomes far more difficult for you to terminate the agreement without losing your earnest money.  Thus you should make sure that any inspections that you are having done are completed (and results reviewed) before the expiration of your due diligence period, and if you are obtaining financing on the purchase, that you have been approved for financing by your lender before the expiration of the due diligence period.  Please review Section 4 of your contract carefully for a better understanding of the due diligence period and your rights relating thereto.  If you have any questions about the due diligence period please call us to discuss before it expires

Who We Represent

We represent you to the extent of ensuring that you acquire good and marketable title to the property.  We can advise you on legal questions concerning title to your property, title insurance and the covenants and conditions of your loan documentation.  We represent the lender (if you have one) to the extent of assuring full compliance with its loan closing instructions.  In the event of a dispute between you and the lender, we will not attempt to represent either party.

We do not represent you with respect to the terms of your loan agreement with your lender (i.e., your loan amount, interest rate, conditions for later conversion or refinancing, necessity or amount of mortgage insurance, etc.).  It is your responsibility to ensure that you are getting the terms you want.  Therefore, we ask that you obtain a copy of your closing instructions from your lender a sufficient amount of time before closing to enable you to carefully review them and promptly resolve any disagreements or disputes with
the lender concerning the terms of your loan.

Because of the numerous difficulties which can arise during the loan processing, we request that you remain in close contact with your lender and with our office.  Last minute delays in closing can usually be avoided if you determine in advance what conditions must be met by you.

Preparation of Seller Documents

We will frequently be requested by the sellers or their Realtor to prepare the deed of conveyance and lien affidavit for the seller. NC Rules of ethics allow us to do this work because it is basically a ministerial duty in that the sellers’ documents must be prepared according to the terms of the contract.  However, if you would rather we not prepare the sellers’ documents, for whatever reason, we will insist that the sellers have another attorney prepare their documents.  If a dispute later arises between you and the sellers, we will not undertake to represent either side.

Please let us know immediately if you would prefer that we not prepare the Sellers’ documents.

What Services We Perform

Our standard closing fee includes:  (i) conducting the title examination of the property; (ii) ensuring that the deed of conveyance and the loan documents have been properly prepared and executed; (iii) preparing the HUD-1 Settlement Statement; (iv) ensuring that the closing funds are properly received and disbursed pursuant to the HUD-1 Settlement Statement; (v) reviewing the map of survey of the property for potential problems or issues; (vi) ensuring that the transaction is properly closed and that the deed and deed of trust (if any) are duly recorded; (vii) ordering owners’ and lender’s policies of title insurance; and (viii) sending payoffs of the outstanding liens, along with cancellation of lien instructions to the proper creditors.

We generally will not act as an escrow agent for the purpose of holding money for repairs or any other problems which are to be resolved after the closing.  It has been our experience that holding money in escrow for post closing issues frequently leads to greater dispute and lawsuits.  Your best course of action is to resolve these issues before the day of closing.

Title Examination & Title Insurance

Prudent purchasers conduct a title examination prior to purchasing real property.  A title examination involves searching through various banks of public records to determine whether the title to a tract of real property has any defects or encumbrances against it.  In other words, a title exam helps answer the question of whether the seller has the right to convey the interest in the property that the seller has
asserted to you that he/she can convey.  A title exam helps reduce the possibility that after you purchase the property someone will unexpectedly come to you and claim that he/she has a superior right to ownership or to a security interest in the property.  A title examination also provides the basis for obtaining title insurance, which insures an owner (and lender) against losses that may result from certain claims against the property.  A title exam does not include an investigation into zoning or building code compliance for the property, these are issues for your property inspectors to investigate.

It is our standard policy to conduct a full title examination of the property unless you are buying in a planned unit development in which case we will generally conduct a search back to the conveyance in to or out from the original developer (in which case we would tack to a prior title policy – see below).  This means that we will search the title for a period of no less than thirty years prior to closing or back to the date of recording of the deed in to or out from the developer of the planned unit development, whichever occurs first.  In either case we will also strive to find an existing policy of title insurance on the property and will “tack” to that policy which will generally allow for a better rate on your title insurance.  While defects in the title occurring before our search period would not be reported in our title opinion if we “tack”, they would be covered by the existing title policy, so you should receive the same title insurance coverage as if we had conducted a full search of 30 years or more.

Finally, our general practice is to obtain a standard owner’s policy of title insurance.  Such a policy generally protects an owner from loss due to such risks as:  someone else owning an interest in the property, that title is defective due to improper execution of documents, lack of access to the property, various liens against the property, etc.  Some title insurance companies offer an Enhanced Policy that covers the risks in the standard policy and additional risks not covered by the standard policy.  For example, some enhanced policies increase the amount of coverage over a certain number of years, which insures the appreciation of the property, at least to some degree.  If you are interested in discussing the particulars of coverage for either or both types or policies, or if you would like for us to obtain an enhanced policy for you, please let us know.  We will gladly discuss these matters with you.

If you have questions about the scope of our title search on your property or if you have questions regarding the coverage of your title insurance you should feel free to contact us to discuss this matter.

Click here to see title insurance rates effective Apr 1, 2016.

Click Here for a Rate Calculator to give you an estimated rate for your  title insurance policy.

INSTRUCTIONS:
1. Enter purchase price in “Owner Coverage Amount” and then,
2.  Enter Loan Amt in“Mortgagee Coverage Amt” and then,
3.  Hit Calculate.

Surveys

As part of your due diligence we recommend that you have the Property surveyed by a surveyor licensed by the State of North Carolina.  A survey will tell you where the true boundaries of the Property lie and can reveal problems with the Property that are not otherwise apparent.  For example, a survey could reveal that a neighbor has made an improvement (such as a fence, driveway or shed) which encroaches on the Property, or that the seller has made an improvement which encroaches on a neighbor’s property.  A current survey could also reveal whether a house violates any setback restrictions that may be contained in restrictive covenants on the Property.  Furthermore, a survey is an invaluable tool for ensuring that the description of the Property in the deed is accurate and complete.

Lenders generally do not require that you have a survey of the property because the title insurance company will provide coverage to the lender for loss or damage resulting from a condition which would have been reflected on an accurate survey.  The title company will not offer you the same coverage without a current survey.  This means that any problem which would have been revealed on a survey will not be covered by your title insurance policy.

Before ordering a survey, you should check with the seller (or have your real estate agent check) to determine whether the seller has a copy of a recent survey.  If the seller does have such a copy, you may be able to get title insurance coverage with the seller’s copy.  We will be happy to discuss this possibility with you if a recent survey can be located.


If I’m buying a lot in a Planned Unit Development do I really need a survey?

Many clients who are purchasing a lot in a PUD like St. James Plantation, Winding River Plantation, Riversea, etc. ask whether they need a survey even though there is a recorded plat of their lot on record in the register of deeds and often time survey stakes still marking the corners.

First of all, in NC you are not required to have a survey in order to close.  Many buyers in planned unit developments elect not to obtain a survey before purchasing a lot. It is up to each individual buyer in his/her given situation (after examining the property and after consulting with his/her agent) to determine whether a survey is necessary.

However, if you do not have a current survey (one that was done specifically of your lot within the pastyear or so) your title insurance policy will take exception to all problems that would be reflected on a current survey (such as an encroachment or problem with the lot lines). Thus, with this exception in the title policy you would not be able to recover from the title insurance company any damages you suffer as a result of such problems. And, while a vast majority (90%+) of the surveys in a planned unit development will come back “clean” (showing no issues), we have had one or more situations where a client discovered a problem with their lot after closing when they did get a survey done before closing.

ACTUAL CASE IN POINT – One of our clients bought a lot in a PUD and decided not to get a survey because he was planning to build within the year and would just wait to get the survey before he went to build.  When he did get the survey it turned out that the stake at the back right corner of the lot was apparently in the wrong place and needed to be moved 3ft. to the right (and in essence take some of
his neighbor’s land).  Well after consulting with the surveyor he found out that the original plat of his section of the neighborhood had apparently been miscalculated so that the total of all lot lines along the back of that section (as shown on the recorded plat) came up to 3ft more than was actually on the ground, and it turned out that his lot was where the error became apparent.  Thus, due to this error, his
lot was in essence 3ft. smaller along the back line than was shown on the recorded plat.  In lieu of suing his new neighbor, he and his neighbor agreed to split the difference – agreeing that each would take a 1.5 ft. loss in that back corner.  Title insurance would not cover his loss of sq. footage or his costs associated in working this out.

Due to the risk of issues such as this one, Johnson & Moore, P.A. will only tell a client that he or she does not need a survey if there is in fact a recent survey about which a seller is willing to attest that no changes have been made to the property that would affect the survey.


Please note: J&M will not order Surveys or Property Inspections for Buyers. To see a list of local Surveyor’s and Service Providers click here 

Property Inspections & Termite Reports

During your due diligence period you should also inspect the premises and have a qualified home inspector inspect the premises.  In particular, we suggest having the property inspected to ensure that there are no significant problems with the foundation, with excessive moisture, with flooding and erosion, with the appliances, with the heating and cooling systems, or with the plumbing and sewage systems. Many of these problems are not readily apparent from a casual inspection but require an expert to bring them to light. Furthermore, if you hire a professional “home inspector” to inspect the property for these problems, be sure you know what aspects of the property the inspector will inspect and perhaps more importantly what he/she will not inspect.  Depending on the age and location of the Property, it may be appropriate to have the property inspected by several different experts who are trained in different areas.

In addition to having the property inspected as provided above, we also strongly encourage you to have the property inspected for wood destroying insects and to obtain a report from a licensed pest control operator that discloses any visible evidence of wood destroying insects or visible damage to the property from such insects.  As with many other defects that plague real property and often cause major problems after real property has been conveyed, damage from wood destroying insects can be difficult for an untrained eye to detect and can seriously damage the value of the property.  Furthermore, most lenders require a wood destroying insect report before funding a loan.  Please make sure you order the report in time to review the report and address any issues before closing.

Hazard, Wind & Hail and Flood Insurance

We strongly recommend (and your lender probably requires) that before closing you obtain a hazard insurance and wind & hail policy or policies in an amount adequate to cover you and your lender in the event of a casualty such as fire, theft, vandalism or hurricane.  The coverage should be effective as of the date of closing.  Also, if you are in a flood zone, you may be required to have flood insurance.  You should bring a copy of the policy (or policies) to the closing and a copy of the receipt showing payment of the premium for the first year, or have your insurance company fax the information to our office before closing and we may be able to collect the first year’s premium at closing.

POA Dues & Restrictive Covenants

The property you have contracted to purchase is located in a Planned Unit Development, and as such, is governed by a property owner’s association and is subject to periodic assessments for maintenance of common elements of the community.  In addition, the property is subject to restrictive covenants that impose requirements and restrictions on your ability to improve and use the property.

Please obtain a copy of the restrictive covenants from your real estate agent or the property owner’s association before closing and review the restrictions to ensure that the restrictions will not interfere with your intended use for the property.  If you have trouble obtaining a copy of the restrictive covenants, please call us and we will help you get a copy.

Titling the Property

If you are married, unless you request otherwise, we will put both husband and wife on the deed as Grantees which creates a tenancy by the entireties.  With such a tenancy, if one spouse predeceases the other spouse, full title to the property automatically vests in the surviving spouse.  Thus, the property will not have to pass through the estate of the spouse who dies first.  Also, with tenancy by the entireties, in general, judgment creditors of only one spouse cannot go against the property, with the exception of tax
liens.  For example if a judgment is outstanding against the husband for credit card debt, the judgment does not attach to the property if title to the property is held as tenants by the entireties.

If you are unmarried and purchasing the property with another, the default tenancy in North Carolina is “joint tenancy without the right ofsurvivorship.”  Property held in this manner will have to go through the estate of a deceased owner.  If you are buying the property with someone else and would like, we can put title in both or all names as “joint tenants with the right of survivorship” which allows the property to pass outside the estate of a deceased owner.  In other words, title to the property would automatically vest in the remaining owners of the property without regard to the estate proceedings.

If you have questions on how you wish to title the property, please feel free to contact and discuss them with
us.

Transfer of Title & Occupancy of the Premises

In North Carolina title to property does not transfer from the seller to the buyer until the deed is recorded at the register of deeds.  If you are planning to move in to the house the day of closing, PLEASE NOTE, most sellers will not allow you to move in to the house until the deed is recorded (and they can receive their money).  Recording does not occur immediately after you sign your closing documents.  We generally only go to record once per day, usually in mid to late afternoon.   Also, if you are using a lender, our ability to record hinges upon our receipt of money and funding approval from the lender.  With many lenders, we are required to fax to the lender documents that you sign at the closing before the lender will even order the wire be sent to our account.  Thus, it is not uncommon for us to have to wait until the day after the closing documents are signed to record the deed (especially if the closing occurs in the afternoon).

As a general policy, we recommend that you wait until after the deed is recorded to order your move.  If it is not possible to wait, we strongly suggest: (a) that you not schedule to close on Friday; (b) that you schedule the closing as early as possible in the day; and (c) that you gain a full understanding of the possible stumbling blocks that could prevent us from recording the deed on the same day you sign.

Because of the multiple parties involved in a closing transaction (agents, brokers, lenders, attorneys, etc.), because of the numerous steps we must take (even after you sign) to ensure that your closing is handled properly and in accordance with your lender’s instructions, and because of the many variables that are beyond our control:  WE CANNOT GUARANTEE THAT YOU WILL BE ABLE TO MOVE INTO YOUR HOUSE ON THE CLOSING DATED.


Please note: J&M will not handle Transferring Utilities or Contacting Utilities regarding New Ownership EXCEPT for SE Brunswick County Sanitary Dist. 

Our Fee Structure & Your Funds to Close

Our basic fee for handling a residential closing without a lender is $600 ($450 title examination and $150 closing fee).  Additional charges apply for loan closings, for short-sales & foreclosures and if unexpected difficulties arise or if the drafting of extraneous documents (such as escrow agreements, trust documents or powers of attorney) is required.  Please call for a price quote for your specific closing. Our standard fee does not include recording fees, overnight fees or the title insurance premium.  Also, if we perform the title search (in whole or in part) and you subsequently decide not to go through with the closing, we will charge a fee for work requested and performed.  Thus, it is important that you let us know as soon as possible if you do not intend to close for whatever reason.

If you are taking out both a primary and secondary loan at closing, we will charge an additional $250 fee for the second loan.  This fee covers our review, preparation and handling of the closing package and also covers our title certification to the secondary lender (while the lender may not require title insurance, the lender will require us to provide assurance to them that the title is clear).

Before the scheduled closing date, we will provide you, your lender, and/or your real estate agent with a draft copy of the settlement statement which will inform you of the total amount of money you will need to bring to the closing.  Pursuant to State Bar Regulations, all amounts due from you must be in the form of either a confirmed wire of funds to our trust account or certified funds.   Official Bank checks
should be made payable to “Johnson & Moore, P.A. Trust Account.”


J&M requires a wire transfer for any amounts over $2,000. Please contact us for wiring instructions.  

Seller Credits on Loan Closings

If you are taking out a loan to purchase the property, ALL CREDITS FROM THE SELLER TO BUYER MUST BE APPROVED BY THE LENDER AND BE REFLECTED ON THE CLOSING DISCLOSURE.  You will not be allowed any credits from the seller that are not reflected on the Closing Disclosure, such as credits for repairs that are not completed and for purchase of personal property such as furniture.  IF A BUYER RECEIVES MONEY FROM THE SELLER AND THE MONEY IS NOT INCLUDED ON THE CD, THAT CONSTITUTES LOAN FRAUD.

THERE ARE NO EXCEPTIONS TO THIS POLICY!

St. James Golf Membership

If you are purchasing property in St. James Plantation and your purchase includes a golf membership, please make sure that you contact Becky Jones at bjones@troongolf.com to obtain an application and to determine the fees obligations associated with your membership.  J&M does not advise on golf memberships and generally is not involved in the application process or in determining the amounts or due dates for your membership dues.


J&M does not advise on Golf Memberships and is typically not involved in the golf membership application process other than collecting and submitting fees per the Offer  to Purchase & Contract 

Tax Payments & Prorations

In Brunswick Co. real-estate taxes are paid in arrears.  Tax bills for the current are released in or around mid-August and are not considered late until after Jan. 5th of the following year (thus 2015 taxes will not be considered late until Jan 6th of 2016).  The standard form contract provides for proration of taxes through the date of closing.  If the tax bills are released as of closing, J&M will collect the taxes (a portion from the buyer and a portion from the seller based upon %age of the year owned) and pay it to the taxing authorities.  If the tax bills are not released as of closing, J&M will provide on the settlement statement (lines 210 & 211 & 510 & 511) for a credit from the seller to the buyer for the seller’s portion of the year and the buyer will be responsible for payment of the entire year’s worth of taxes.  The taxing authority will generally send the tax bill to the seller because they are required to send the bill to the owner as of Jan. 1st of the tax year (Jan 1, 2015 for 2015 taxes).

To obtain and pay a tax bill for the county, please go to  Brunswick County Tax website  and input your tax parcel ID number, seller’s name or property address to retrieve a copy of the tax bill and send payment to Brunswick Co. Dept. of Revenue PO Box 29, Bolivia, NC 28422.  If your property is subject to city taxes as well, check with the tax department of your city to obtain a copy of your tax bill for the city.  Please note – the county collects for the Town of St. James so the only bill that is needed for property in St. James Plantation is from the county.


Please note: Taxes are paid in arrears. Tax bills are released in the fall of each year. J&M WILL NOT collect & pay taxes for the year unless bills have been released. If taxes are not paid at closing, the BUYER is responsible for payment of the full tax bill & received credit at closing from the seller for seller’s portion of taxes.

Waterfront Properties

If you are buying property that adjoins the Atlantic Ocean, the Atlantic Intracoastal Waterway, the Davis Canal, Montgomery Slough or other similar body of water, please note that any portion of your property that is below the mean high water mark, that contains a navigable body of water or that is considered “submerged lands” will all be considered to be property owned by the State or Federal Governments.  If you are hoping to build a pier or dock out into such body of water (“riparian rights”), we suggest that you contact the NC Division of Coastal Management to determine whether they will authorize the type of structure that you intend to build upon your property.

J&M’s title exam (and any title insurance policy obtained by J&M) does not include an opinion as to riparian rights (ie. rights to use of adjoining bodies of water for purposes such as piers or docks) that may be incident to any property.  J&M’s title exam (and any title insurance policy obtained by J&M) also specifically excludes any portion of the property that lies below the mean high water mark or is considered “submerged lands.”  J&M suggests you obtain a current survey during your due diligence period so that you will be aware of the actual location of any such delineations on the property.

Also, if you are buying property that adjoins the Atlantic Ocean, please be aware that any portion of the property that has been the subject of a beach renourishment program will be excluded from our title opinion and title insurance coverage.  You should also be aware of the current location of the setbacks on your lot as some ocean-front lots are currently “not buildable” or “not re-buildable” when taking the setbacks into account.  Obtaining a current survey during your due diligence period will help you with these considerations.

 

TITLE INSURANCE RATES EFFECTIVE APRIL 1, 2016 – Click here to see revised rates.

 

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