Buying Property in North Carolina

So, you are ready to start looking for a new home, a second home, or . . .  Looking and searching is and can be fun.  While this is where everyone would like to start, the most prudent place is to obtain a pre-qualification for financing if your purchase is going to require you to obtain a loan.  Lenders doing lending in our market are the best resource for this and we can assist you with getting connected with these folks.  It is fairly painless and most lenders are doing it thru phone interviews and online now.  Typically you will get an answer within 24 hours or sooner.

Some words of caution should go along with this. 

• Tell your lender everything that might be pertinent regarding your financial matters, obligations, and employment.  Don’t hold back or try to hide anything.  It could haunt you later.
• Don’t make assumptions about interest rates or terms.  The lender is your best resource to gain this information.  In fact they are the only ones – not your real estate broker (as wise as we think we would like to be!)  Varying loan amounts, terms, and personal qualifications are all factors.
• Make sure that your lender is familiar with lending on properties similar to what you are searching for.  For example, lenders from your home town may not understand all of the nuances regarding insurance here in our barrier communities or things like CAMA regulations.  Some lenders do not make loans on condominiums or on raw land.  Some do not make loans for second homes. Find a lender that is savvy in our market place.
• Interest rates and loan to value ratios may be different for a second home or coastal property than what you may find inland.
• Pre-Qualification is different than loan approval.  Loan approval is not complete until after you have made loan application, entered into a purchase agreement, submitted a lot more paperwork, obtained an appraisal and then given Final Approval.  Generally speaking it will take about 30 days after you are under contract to get this completed.

Why should you obtain pre-qualification?  The simple answer is you will know exactly what your purchase power is.  The second part of this is that it gives you negotiating power if the Seller knows that you have been pre-qualified.  It is in your best interest!

You finally found what the perfect property and have successfully negotiated a purchase contract on terms you are satisfied with.  Now is the time to immediately make application for your loan.  Your lender will assist you in completing the application, but here are some things you will need, so go ahead and be ready:

• Up to 3 years tax returns, a minimum of 2 for most lenders.  Have copies ready to go.  If you have not filed the most recent year, then having a copy of an extension is advisable.
• W-2’s for the most recent year or 1099’s if applicable.
• Bank Statements:  some lenders may want as much as a whole year of bank statements.  This will include all statements of equities, checking, savings, and etc.  Have the copies ready to go.

The above is not the full extent of what you will have to provide, but it is best to go ahead be prepared.  When the lender asks for additional information, give complete information as requested and do it quickly.  Also be prepared to give the lender some money when making loan application.  It does not come free!  Read Here for more checklist and explanation.

Now that you are under contract to purchase property, that same contract allows you to perform Due Diligence.  This is a time period for you to make sure that everything “is as it seems”.  It is time to dot the i’s and cross the t’s.   Making loan application is discussed elsewhere and is not discussed here.  That is part of the due diligence investigations – making sure that you can borrow the funds needed to consummate the closing.

With the loan application made, there are other tasks as outlined here:

• Home Inspection:  Assuming that it is a home that you are purchasing, you will want to engage the services of a licensed home inspector.  We are happy to provide a list of inspectors we have worked with in the past.  It is part of your responsibility as a Buyer to contract for the home inspections.  The inspector will work for you and is an independent 3rd party.  Having a home inspection is not required, but is highly recommended.  Here is more reading on Home Inspections.  Inspectors will document any deficiencies that need attention that can then be discussed with your agent how to handle any requests to the Seller to take remedial action.
• Survey:  Our recommendation is that everyone have a survey completed unless it is new construction and the builder can provide one.  The survey provides the peace of mind that there are no encroachments from the neighbors onto the property being purchased and vice versa.  As well it will verify where the property corners are located.
• Wood Destroying Insects Inspection:  This is the long way of saying to hire a licensed pest control company to inspect the property to insure there are not pests invading or damaging the property. In fact North Carolina has its own firm for this referred to as a WDIR-100 Form.  It is required for all VA loans.
• Septic Inspection:  If the property has an onsite waste water treatment (septic) system, then it should be inspected to insure that it is operating correctly.
• Well Inspection:  If the properties water source is a private well, then the well should be tested and specifically a water quality test performed.
• Insurance:  Contact an insurance agent that writes policies in the geographical area to obtain quotes on insurance.  Warning: your personal insurance agent may not be the best resource for your insurance.  In the coastal area and in particular on the barrier islands we have flood insurance, wind insurance and the regular home owner insurance.  These may be three different policies.
• Appraisal:  Your lender will order the appraisal, but it is something that you will want to track and follow up on to insure that is being completed during the due diligence period.

As your agent, we will assist you in keeping up with all of these tasks.  There could be additional tasks or inspections that may be needed.  The objective is check the boxes and make sure that you are informed.

The short answer to this question is that it gets negotiated between you and the Seller.  As your agent, this is something that will be discussed after the home inspector has concluded the home inspection.  Most every home, not matter what its age has items that need attention.  First off – Don’t be alarmed!

In our portfolio of prescribed forms, we have one just for the purpose of requesting that Sellers make certain repairs which a home inspector has suggested or even something that you as a Buyer have noticed.  It could take the form of asking the Seller to complete repairs or requesting that the Seller may a money concession in lieu of repairs.  The Buyer signs the request and then the Seller is requested to agree.  If the Seller agrees to the request in writing, then this form/document becomes part of the contract documents between the Buyer and the Seller.