The process of buying a home can be stressful, particularly when last minute
problems crop up that threaten to delay closing, or disrupt the sale.
Here are a few steps that buyers can take before closing to smooth the
process, and protect their interests over the long term.
1. Get All Recommended Inspections
Buyers should have any property they intend to buy inspected by knowledgeable
professionals well in advance of closing. A full home inspection can reveal
issues that may affect the value of the property, the price, and the terms
of the final contract. Additional, more specific, inspections may also
be necessary. Pest control inspections are a good idea and you may also
want to do air quality tests if there are any concerns about mold or other
contaminants. If the house has a septic system, you may consider having
that inspected as well. In Western North Carolina, radon inspections are
highly recommended. Due diligence takes time and money, but can often
pay off in the long run.
2. Get a Survey
Getting a survey is very important step that too few buyers take when purchasing
residential real estate. Surveys are valuable because they can reveal
issues that may not necessarily be found in the title work. Because surveyors
walk the property on foot they will find any existing encroachments and
other issues that are not listed on paper. For example, a surveyor can
tell if another owner's driveway is encroaching on your property or
if your driveway is on someone else's property. Most importantly,
if you don't get a survey, then your title insurance policy will list
an exception on your policy for any matter that would have been revealed
by a survey. As a result, a wide scope of things that could be excluded
from title insurance coverage if you don't get a survey.
3. Gather all Information for Lien Waivers
If any construction or repairs have been performed on the property or materials
provided to the property in the 120 days prior to the closing, lien waivers
will need to be acquired from the contractors who did the work. A lien
waiver is legal document in which a contractor states that they have been
paid in full for the work that they did and that they waive any future
rights to place a lien against the property.
At least a week before closing, sellers will need to compile a list of
any work that have been done on the property in the previous 120 days,
and the amount that the work cost. They will need to send that list to
the closing attorney so that the attorney can determine which of the contractors
they will need to get lien waivers from. For instance if the buyer insists
that the seller install a new roof before closing, then the seller will
have to pay for the roof and get a lien waiver from the contractor that
4. Make advance arrangements to get your purchase funds to the attorney
Wire transfers are the only method of payment accepted by many of real
estate attorneys today. Most likely, you will not be able to pay for your
real estate transaction with certified checks, or cash, or any payment
method other than a wire. Wire transfers require the buyer go to the bank
during business hours. It can take several hours for the bank to actually
wire the money to the closing attorney. Because of this, it is a good
idea to go to your bank a day or even two days before your scheduled closing
to arrange for the wire.
Making payment arrangements in advance of the closing can reduce stress
on all parties. Remember the sale cannot be recorded with the register
of deeds until the funds are in the attorney's account. The funds
cannot be dispersed until the transaction has been recorded. If the funds
are in place, no one will have to nervously wait for the money to hit
the account before the attorney can go record the transaction with the
register of deeds.
5. Make Arrangements for the Key Exchange
It is less common today to have a formal sit down closing where everyone
meets at once for a real estate closing. Most of the time when we represent
sellers, we obtain the seller's closing documents directly from the
seller, and then courier it over to the buyer's attorney whenever
the buyer is ready to record. The question of how the keys will be exchanged
should be answered before the day of closing.
In most cases the realtors will take care of transferring keys from the
previous owners to the new owners but, as online real estate databases
grow in popularity, we are seeing more and more real estate transactions
that do not involve agents. In this case, the buyers and sellers will
need to consider the question of how they coordinate tasks that real estate
agents normally handle for them.
Michael Thompson is a principal with The Van Winkle Law Firm, where he focuses his practice on
commercial and residential real estate transactions in Henderson, Buncombe, Polk and Transylvania counties. Since
joining the firm in 1989, he has represented local, regional and national
developers in the procurement, planning and implementation of commercial
and high-end residential projects.