Speaker 1: So, you are wondering what happens at a real estate closing. Guess what? We're going to find out right now. Hey everybody, I'm Tiffany Weber, a North Carolina real estate attorney, and I'm going to talk to you today about what happens between when you sign the contract and when you actually close on the property. The closing itself is the culmination of weeks of hard work by all the parties involved, including you, the buyer or seller, depending on which party you are, both realtors, lenders, and the law firm. The very first thing that has to happen after you sign the contract is your attorney has to perform a title search. In North Carolina, attorneys represent buyers in a real estate closing, so we're going to make sure that we do a full history report on the property to make sure that there is nothing that can impede your ability to own that property free and clear. A title search can sometimes reveal that there are easements affecting the property. Perhaps the seller might have a lien or a judgment or a bankruptcy affecting the property that has to be satisfied so that it doesn't affect the buyer. The title search will also prove that the seller actually owns the property, especially in cases of an estate. After the title search is done, there are a lot of things that have to happen all at once, whether it's by our law office, by your lender, or by your agent. Some of those things include you're likely going to need an appraisal if you're purchasing a home with a lender. They're going to want to make sure that the house is worth what they're actually going to lend you the money for. There's also going to need to be inspections on the property to make sure that the condition is good. That way you can ask your seller for repairs if necessary and they can decide whether or not they'll complete those. Also, while all of this is going on, your lender is hard at work gathering all of the information from you necessary to make sure that you can get approved for the loan at the terms that you want. Also, our office recommends to every single buyer that you should get a survey on the property that you're buying. It's so important for a lot of reasons that I'll go into in other videos, but the main thing you need to know is that a survey is going to identify the boundaries of your property and make sure that there isn't anything as far as an easement or encroachments affecting the property that you should definitely know about. You would be surprised to hear the horror stories that can come about when you don't get a survey. I can't believe it, but this actually happened. I've seen a situation where a person was buying a property where the boundary line actually cut through the middle of the home. I know it's crazy, but it can happen, especially with family land and lack of surveys. So usually those things are simple fixes that require a couple extra pieces of paperwork, a couple extra filings, but it still has to be done, and all of that could have been prevented with a survey. While everything else is going on, we're at the law office preparing your closing documents. Now that's a long, thick stack of paperwork that you're going to have to sign at the closing table, and it includes a lot of official documents that will be recorded with the Register of Deeds to make sure that you gain official ownership of the property. During this process, if we come across any issues, we'll let you or your agent know so that we can get everything cleared up before the closing date. And once your lender gives us the clear to close, that means that you can come in and sign all the paperwork. So you're at the closing table. You're wondering, what am I going to sign? Well, it's a lot, and that's starting with, we're going to show you a plaque or some sort of visual reference of the property to make sure that you're buying what you think you're buying. Again, another horror story that thankfully didn't happen in our office, but it's happened before where, without a survey, someone bought a property that they thought was actually the property down the street, and they didn't know it until months later. So in our office, we always like to show you the property right there on a piece of paper and ask you, is this what you're meaning to buy? Next, we're going to go over the title work, which I mentioned earlier, is the history report on the property. So we'll call out anything that you should really be aware of, whether or not there are restrictions on the property that might affect what you want to do with it. For example, some neighborhoods, you can't have chickens. If you really want chickens, that's not a good place for you to live. Also, we'll talk to you about whether there aren't restrictions on the property, what rules you do have to follow, because you still have to follow local zoning laws or the laws of your town or state. So after we've talked to you about the title report, we're going to go over the document known as your closing disclosure. Now you get this at the very, very beginning of the process, and it's called a loan estimate from your lender. So what your lender does is comes up with a really close guess of what your closing costs will be, what charges will be assessed to you at the closing related to you getting the loan. But because that can change over time, depending on what inspections you may need, whether you get a survey or not, then you have to get what is an updated closing disclosure right before the closing. Now, most of the time people will get that, see it in their email, disregard it. So that's why we spend time at the closing going over every page of that disclosure so you understand what your charges are related to the closing. So that includes what your down payment is. Do you have any escrows? And escrows, that means that if your lender is going to pay your taxes and insurance, it'll come out of your monthly payment every month rather than you paying it separately. We'll talk to you about that too. We'll also talk to you about features of the loan, meaning do you have any weird terms that you should be aware of? Is it out of the ordinary? Does your rate fluctuate? Will you be paying the taxes and insurance yourself? Can you prepay? We'll talk about all of those things. And finally, we'll talk to you about how you can get in touch with everyone that was involved with the loan or with the closing, and that'll also be included on your closing disclosure. Next, we're going to go through a series of affidavits or affirmations where you can tell us your marital status because it is important in North Carolina what your marital status is because it affects how you hold title to property. So we're going to affirm that with you, make sure that we've got everything correct on the deed. Speaking of how you hold title, meaning how you own the property, we're going to look at the deed with you and make sure that your name is spelled correctly and also make sure that we have a good mailing address. This mailing address is where the tax office is going to send you your tax bill every year just so you can be informed. During this process, we're going to have your seller affirm that there are no liens that could affect the property, meaning there's no one that's done work on the property that hasn't been paid. And we're also going to make sure that the seller affirms that if someone perhaps could claim a lien on the property and hasn't done so yet, that they'll make sure they handle it for you. After this part, your seller is usually done with the process and everything left is for the buyer to sign. And first up is your promise to pay the money back. Yes, you have to. That is done by using the note. So the promissory note is where it lays out the terms of your loan, such as when you begin to repay the money, at what rate, and if you default, what the percentage points might be that you have to pay as a penalty. Following that, you're going to sign your deed of trust. And that's the instrument that gives your lender its security interest in the property, which is a really fancy way of saying, if you don't pay, you don't stay. After you've done those two very important legal documents, we'll move on to the other documents that your lender wants you to sign. Usually that includes your loan application, where you affirm that you haven't quit your job since you applied for the loan and that your income hasn't changed substantially. You didn't run off, buy a bunch of furniture or appliances or a boat. Next, we'll look at your amortization schedule, which shows you how principal and interest is applied to the loan over time. So which portion of your payments actually goes to paying down the loan. Depending on your lender, there could be several more documents that you sign that affirm your tax identification number. Or if you have an FHA or a VA loan, then you're going to have other documents specific to the program that you're using. I know this is a lot of information, but every closing is different. So this is a general idea of what you can expect at your closing. And then once you've signed everything, all that's left is for the deed to be recorded. Then the home is yours. All right, everybody. I hope that information was helpful. At our law firm, we want to educate everyone and demystify the real estate buying and selling process as much as possible. So if this helped you, make sure that you subscribe, like, comment, ask us whatever questions you have, and we'll see you at the next video.