20 North Carolina Real Estate Terms You Should Know
Want to know what all those terms and documents are that you sign during the home buying process in Charlotte, NC? We've put together a comprehensive list of things you might want to know.
The legal relationship between a real estate professional and their client which includes fiduciary trust.
Broker in Charge
The highest level of licensure you can reach in North Carolina. Supervising managing broker of real estate office with provisional brokers.
Contingent Sale Addendum
If a sale will only occur or exist when certain circumstances are met (like the sale of the buyer's current home), a Contingent Sale Addendum must be included with the Offer to Purchase and Contract.
The Closing Date is a term in the original Offer to Purchase and Contract. Both buyer and seller have agreed that this date is the day they choose to complete the transaction and transfer ownership of the property. However, in North Carolina, there is a 14 day grace period that may be used for unforeseeable circumstances. No additional paperwork is needed for this period of grace.
This is a sub category of Dual Agency. When one firm represents both the seller and the buyer, one or more real estate agents can be assigned, by the firm, to represent only the interests of either the buyer or the seller. The confidential information that is shared between the client and the designated agent can not be disclosed to the designated agent for the other side without the client's consent. All designated agents will be identified to both the buyer(s) and the seller(s).
This is when the firm represents both the buyer(s) and the seller(s). Generally one real estate agent represents both sides unless one of the clients has requested a Designated Agent. In this situation, the real estate agent must be careful not to disclose any confidential information. Because of this, they cannot advise either side during the negotiations. They must remain neutral.
Due Diligence Period
This is a period of time that is agreed upon in the Offer to Purchase and Contract. This time is allotted for the buyer(s) to do any investigation that they deem necessary to move forward with the transaction. This may include inspections, a survey, loan application, appraisal, perusal of HOA financials, title search and repair negotiations. They buyer(s) pays a negotiated fee directly to the seller for the right to conduct these investigations during this period of time.
Due Diligence Request and Agreement
Used in conjunction with the Offer to Purchase and Contract. Based upon buyer’s Due Diligence, the buyer may request the seller to take certain actions, including but not limited to the completion of requested repairs to the property. This Form may be used by the buyer to make such a request(s). If the buyer and the seller agree on what actions the seller will take, this form may also be used to put their agreement into writing.
Earnest money is called such because it is a deposit of sorts that shows you are "earnest" about moving forward with the real estate purchase. The earnest money is held in a trust account by an escrow agent. The money will be held until termination of the contract during the due diligence period or the closing of the purchase transaction. The earnest money will be credited to the buyer at closing.
Exclusive Buyer's Agency Agreement
This is the agreement between the firm (real estate agency) and the buyer(s). This outlines how the buyer(s) will work with the representative of the firm (real estate agent). This also outlines how the firm will be paid.
A general inspection is a non-invasive examination of the condition of a home. Inspectors are required to be licensed in North Carolina. They may recommend that you obtain additional inspections from more specialized professionals such as roofer, septic specialist, engineer, plumber or other type of specialist who can further investigate a potential issue with the property.
The investigation of a property includes anything that may affect your future ownership. This could include the financial aspect of the property, the condition, the history of the title and any material defects of the property that might not be obvious (ie. buried oil tank, underground spring, flood zone).
Mineral Oil and Gas Rights Mandatory Disclosure Statement
Every property is assumed to own the ground below it along with anything that is in the ground such as minerals or gas. This disclosure lets the prospective buyer(s) know if there has ever been a severing of the rights to the minerals or gas from the property itself.
Offer to Purchase and Contract
This is the legal document that outlines the price and terms in which you are offering in order to purchase the property. When the price, dates and terms have been negotiated and agreed upon, all parties sign the document and it becomes the contract between the parties.
When you are pre-approved for a mortgage, a lender has looked closely at your credit reports, your employment history, and your income — and must then determine which loan programs you qualify for, the maximum amount you can borrow, and the interest rates you will be offered.
A pre qualification if when you have told a lender about your credit history, income and debts. Based on what you have shared with the lender, they have given an opinion that you would likely qualify for a mortgage when you do apply. They have not verified any of the information given by the potential borrower. This is not as valuable during a real estate negotiation as a pre approval.
Professional Services Disclosure
There are a variety of professionals involved in the process of a real estate transaction. The Professional Services Disclosure outlines who the professionals are and who will contact them to get them involved in the transaction. This is a communication tool to make sure nothing falls through the cracks.
Residential Property and Disclosure Statement
This is a statement completed by the seller(s) of the property. The seller is charged with disclosing all facts known about the property that would affect the condition, decision to purchase and financial consideration. This statement includes information about any home owner's association and proposed assessments.
Working with Real Estate Agents
This is a brochure created by the North Carolina Real Estate Association. It is a description of the different types of agency relationships that you may have with a real estate agent, an explanation of the real estate agent's duties to you and an explanation of how a real estate agent gets paid. This is not a contract but you will be asked to sign it as a verification that you received this brochure.