Last week I outlined the first 3 of the 5 things that buyers really need to know about the North Carolina Offer To Purchase And Contract that are so different from other states. It is so important that you as a buyer are fully educated about all of the unique nuances of North Carolina real estate. The 5 points outlined in these two posts point out how unfair the wording can be to buyers. So without further ado, here is part 2 of the post… buyers beware!

#4 – Closing = Accepting The Home In Its Current Condition

When you go to closing, you are accepting the home in its then current condition. You as the buyer will want to ensure that you complete the final walkthrough the morning of closing and not sooner. Why is that?

Once you sign the closing papers, then the home is yours, problems and all. It is your responsibility as the buyer to ensure the home is in the same condition at closing as it was on the day that you signed the purchase contract.

In last week’s post I mentioned that sellers are only obligated to make repairs if the house is not in the same or better condition at closing as on the day of the contract, wear and tear excluded. For example, if there was a major water leak in the home or if the sellers put a big hole in a wall while moving out, then they would be obligated to repair those situations. Also, should the seller refuse to make those repairs, then the buyer can terminate the contract and get their Due Diligence Fee and Earnest Money Deposit back, in addition to other money owed for inspections, appraisals, etc. The seller refusing to make the repairs is a breach of contract, which is why the Due Diligence Fee would be returned.

For this reason, I only allow my buyers to complete the final walkthrough the morning of closing to catch any potential issues before signing the final documents at the attorney’s office.

#5 – No Contingency Clause To Sell Your Home First

If you are a buyer and must sell your home before purchasing, then you won’t like what I have to tell you. North Carolina does not have a real contingency clause. There is a section in the Offer To Purchase And Contract that asks if you need to sell your home in order to purchase, but there is nothing there to actually protect the buyer.

If you need to terminate the purchase because you are unable to get your home under contract or close in time, then the Due Diligence Fee will not be refunded. I encourage my buyers to request a longer due diligence timeframe so that they could potentially get their Earnest Money Deposit back even if they cannot get their Due Diligence Fee back.

In fact, a seller may see you as a greater risk than other buyers. With that said, they may request an even larger Due Diligence Fee from you in order to help mitigate the pitfalls of the contract falling through.

Remember, there is no contingency clause and buyers need to be aware of what they may lose if they need to back out of the contract.

Is There Anything Good For Buyers In The Offer To Purchase & Contract?

Absolutely! There are definitely a few good points in the purchase contract that speak directly to protecting the buyer’s best interest.

A seller must provide buyers with a clean title to the home. This is extremely important and the number one thing that attorneys will research for you. What does this mean?

• Identifying all outstanding liens (even from past contractors) to be paid at closing by the seller
• Identifying any additional mortgages or loans to be paid at closing by the seller
• Identifying any encroachments via a property survey that a seller my clear up before closing

And there can be several other instances that cause “cloud on title”. It is the seller’s responsibility to pay for providing a clean title.

If the seller refuses to clear up any clouds on title, then that is a breach of contract. When a seller breaches the contract, then you are entitled to get your Due Diligence Fee and Earnest Money Deposit back, in addition to any money that you have spent on inspections, surveys, appraisal, etc.

Along with checking for clean title, the attorney needs to make sure that you are buying a home from the correct owner and that there may not be other extra owners out there. There are times when an estate sale has multiple siblings in various states that must be included. This why an attorney needs to do so much review before closing.

And don’t forget that a seller must deliver a home that is in the same or better condition than it was in when the contract was signed. This is the one time a seller is absolutely obligated to make repairs or else they are in breach of contract. Now you know that if a seller breaches the contract, that you as the buyer are entitled to your Due Diligence Fee, Earnest Money Deposit and other money back from the seller.

In Summary…

The wording of the North Carolina Offer To Purchase And Contract truly tends to favor protecting the seller over protecting the buyer, and this can feel so unfair. I work with buyers from all over the country, all over the world and even within North Carolina who aren’t aware of all the little nuances that the purchase contract says. Luckily I have worked with so many buyers that I know how to explain the contract and help protect you. (I always encourage buyers to consult with a real estate attorney for further explanation.)

Don’t forget, there are some sections that are worded to protect the buyer, and I am grateful for that!

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If you are interested in finding out how I can assist you with your real estate needs, click this Calendly Link to book time for us to chat.

Relocating to the Cary area? Click here for the Cary Relocation Guide.

Thinking of selling your home? Click here for the Seller’s Guide.

Learn More:

• Click here to learn more about the Due Diligence Fee.
• Click here to learn more about the Earnest Money Deposit.
• Click here to learn more about the benefits of having a buyer’s agent.
• Click here to learn more about the benefits of having a seller’s agent.

Happy Home Buying & Selling In North Carolina!