One of the questions we were asked the other day made me think for a moment – because of the way it was asked. The caller wanted to know, “Do First Time Home Buyers in NC Need A Lawyer?” Well, we are an Attorney State in NC – meaning that when you buy a house, your “closing officer” who helps you sign all of the paperwork will be an attorney or their assistant. I initially thought the person was asking if they needed their “own” attorney to close a loan in NC.
In other states, particularly in the North East, it is common for each party to have their own representation, meaning both the seller and the buyer get an attorney to look after their best interests. In NC we normally leave that part of the negotiating process up to the Realtors. They can represent both parties under Dual Agency, but often we find that First Time Home Buyers, in particular, feel more comfortable having a more singular Agency Agreement with their agent. In this situation, where you are dealing with a Buyers Agency Agreement, you can discuss whatever you want to with your Realtor, and they are not obligated to share anything beyond the contract with the Seller or their Agent.
The majority of residential sales contracts in NC are written by real estate agents using standard forms provided by the North Carolina Association of Realtors. These “fill in the blanks” forms were developed by attorneys and comply to our state laws.
The process of buying a house is complex, and most people find it’s easiest to get through with an agent by their side. Paperwork will be flying around like a small tornado, and it can be helpful to have someone familiar with the process to deal with it. Other parts of the transaction will be happening quickly too — hiring inspectors, negotiating over who pays for needed repairs, keeping up good relations with the sellers (through their agent) and more. All of this is second nature to an experienced agent. What’s more, experienced real estate agents usually have contacts with good inspectors, mortgage loan brokers, and others who can make your buying process easier. And they know what’s considered appropriate behavior and practice in your geographical area.
Another way to look at this question is who pays for the Title Company. In many states you close a loan with a “Title” Insurance Company – a private firm that also handles the title work and title insurance on your home. We do require Title Insurance in NC when you are getting a mortgage. And even if you were paying cash, and talking with me about your options – I would strongly suggest that you invest in a home inspection, well and septic inspection and Title Insurance. In North Carolina, you can save a little money if you have the Seller provide their Title Insurance Policy to the Attorney – it can usually be endorsed for you, and they only have to pull public records since the last owner had the title examined.
As far as who pays for the Attorney when you are buying a home – that’s a negotiated arrangement. Often times, if you have a Seller paying for a portion of the Closing Costs, they allow the buyer to decide who they want to use. In the case of a Builder – you will normally find that they will only pay for the Attorney fees if you use their Attorney. Does this mean you are not being represented as well? NO! The Attorney (at least the way I look at it) is there to represent the legal transfer of the property. They are not there for negotiations – just to be sure the title is transferred legally, and there’s no fraud going on.
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I try and answer all questions :)