Your Guide to Selling a Home in North Carolina: Steps, Terms, and Key Details
Selling a home in North Carolina involves navigating a unique real estate process, particularly due to the state’s “due diligence” system. Whether you’re a first-time seller or relocating within or beyond the Tar Heel State, this guide outlines the steps to sell your home, defines essential terms, and clarifies who pays for what, how funds are handled, and why the closing date might shift. We’ve included links to the North Carolina Realtors and the North Carolina Real Estate Commission (NCREC) for definitions and additional information. Let’s get started!
Key Terms to Understand
Before diving into the steps, let’s define the critical terms involved in selling a home in North Carolina, with resources for further reading:
Purchase Price: The agreed-upon amount the buyer will pay for your property, as specified in the purchase contract. It’s the foundation of the transaction and influences other payments like commissions and taxes. Learn more about contract terms from the North Carolina Realtors Forms Library.
Due Diligence Fee: A non-refundable payment made by the buyer directly to you, the seller, when the offer is accepted. It compensates you for taking the property off the market during the due diligence period and is credited toward the purchase price at closing, but you keep it if the buyer backs out during this period (unless you breach the contract). Typically, it ranges from $500 to $2,000, though it can be higher in competitive markets (e.g., $10,000 for a $369,000 home in Charlotte). For details, see the NCREC’s Guide to Working with Real Estate Agents.
Due Diligence Period: A negotiated timeframe (usually 2–4 weeks) during which the buyer can investigate the property through inspections, appraisals, title searches, and other assessments at their own expense. The buyer can terminate the contract for any reason before the period ends (by 5:00 p.m. on the due diligence date), recovering their earnest money but forfeiting the due diligence fee to you. After this period, backing out risks both deposits for the buyer, unless you breach the contract. Learn more in the North Carolina Realtors’ FAQs.
Earnest Money: A deposit paid by the buyer to demonstrate commitment to the purchase, typically 1–2% of the purchase price. It’s held in a trust account and credited toward the purchase price at closing. The buyer recovers it if they terminate during the due diligence period, but you may receive it if they back out afterward (unless you breach the contract). See the NCREC’s License Law and Rules for escrow regulations.
Trust Account: A non-interest-bearing escrow account where earnest money is held until closing. In North Carolina, this is typically managed by a licensed attorney, real estate brokerage, or, in some cases, the closing attorney (e.g., at firms like Jordan & Warshauer Real Estate, JWRE, the closing attorney holds the earnest money). These accounts ensure funds are secure and released per the contract terms. For more, refer to the NCREC’s Rules on Trust Accounts.
Closing Attorney: A licensed attorney who oversees the closing process, including title searches, deed preparation, and fund disbursement. In North Carolina, closings are conducted by attorneys, not title companies, ensuring legal oversight. Learn about closings from the North Carolina Realtors’ Legal Resources.
Standard Forms: The primary form used is the Offer to Purchase and Contract (Form 2-T), created by the North Carolina Association of Realtors and the North Carolina State Bar Association. It outlines the sale terms, including due diligence, earnest money, and contingencies. Other forms, like Form 350-T (Termination of Contract) or addenda for extensions, may be used. Access these via the North Carolina Realtors Forms Library.
Steps to Sell a Home in North Carolina
1. Prepare Your Home for Sale
Before listing, prepare your home to attract buyers. This may include decluttering, making repairs, staging, or enhancing curb appeal. Consider a pre-listing inspection to identify issues that could arise during the buyer’s due diligence period, allowing you to address them upfront (cost: $350–$600).
Who Pays: You, the seller, cover preparation costs, including repairs, staging, or optional inspections.
2. Hire a Realtor
Engage a licensed real estate agent, ideally a Realtor adhering to the National Association of Realtors’ code of ethics. Your listing agent will market your home, set a competitive price based on a comparative market analysis (CMA), and negotiate offers. They’ll also guide you through disclosures and legal requirements. Learn about working with agents in the NCREC’s Working with Real Estate Agents Brochure.
Who Pays: Seller typically pays the commission for both your agent and the buyer’s agent, usually 5–6% of the purchase price, deducted from the sale proceeds at closing.
3. List and Market Your Home
Your Realtor will list your home on the Multiple Listing Service (MLS) and market it through online platforms, open houses, and professional photography. In competitive markets like Raleigh or Charlotte, strategic pricing and presentation are key to attracting offers. For market insights, check the North Carolina Realtors’ Market Data.
Who Pays: You, the seller, cover marketing costs, such as photography or staging, often included in the agent’s services.
4. Review and Negotiate Offers
When buyers submit offers via the Offer to Purchase and Contract (Form 2-T), your Realtor will present them. Offers include:
The purchase price.
The due diligence fee and period (e.g., $1,500 for 21 days).
The earnest money amount (e.g., 1% of the purchase price).
The proposed closing date (typically 30–60 days from the contract’s effective date).
Any contingencies or conditions.
You’ll receive the due diligence fee directly upon accepting an offer, and the buyer’s earnest money is deposited into a trust account (e.g., with the closing attorney ). You can accept an offer, reject it, or counter with adjustments to the price, due diligence period, or other terms. For a sample Form 2-T, see the North Carolina Realtors Forms Library.
Who Pays: The buyer pays the due diligence fee and earnest money. You incur no direct costs at this stage.
5. Navigate the Due Diligence Period
Once you accept an offer, the due diligence period begins. The buyer will:
Conduct Inspections: Hire inspectors for structural, pest, or other assessments (cost: $350–$1,000, paid by the buyer). See the NCREC’s Home Inspection Brochure.
Order an Appraisal: If the buyer is financing, their lender requires an appraisal (cost: $300–$500, paid by the buyer).
Perform Title Searches: The closing attorney checks for liens or title issues.
Review HOA Documents: If applicable, the buyer assesses covenants and fees.
Negotiate Repairs: If inspections reveal issues, the buyer may request repairs, a price reduction, or concessions. You’re not obligated to agree, but negotiations are common to keep the deal on track.
The buyer can terminate the contract for any reason before the due diligence deadline, recovering their earnest money but forfeiting the due diligence fee to you. If they request an extension, you can agree (via an addendum) or decline, but declining risks the buyer walking away. If the buyer backs out after the due diligence period without a valid reason, you may keep both the due diligence fee and earnest money, unless you breach the contract. For termination details, see Form 350-T in the North Carolina Realtors Forms Library.
Who Pays: The buyer pays for inspections, appraisals, and other due diligence activities. You may cover repairs or concessions if negotiated.
6. Address Title and Legal Requirements
The closing attorney, typically chosen by the buyer, conducts a title search to ensure your property is free of liens or disputes. You must provide any required disclosures, such as the Residential Property and Owners’ Association Disclosure Statement, detailing the home’s condition. Failure to disclose known issues can lead to legal consequences. For disclosure requirements, see the NCREC’s Disclosure Brochure.
Who Pays: The buyer typically pays for the title search and title insurance. You cover costs for resolving any title issues, if applicable.
7. Negotiate Closing Attorney Selection
The buyer usually selects the closing attorney, who handles title searches, deed preparation, earnest money escrow , and the settlement conference. If you prefer a different closing attorney, you must negotiate with the buyer. This is uncommon, as the buyer’s choice is typically accepted to streamline the process. If you can’t agree, the contract could fail, but Realtors often mediate to find a mutually acceptable attorney. Learn more from the North Carolina Realtors’ Legal Resources.
Who Pays: The buyer typically pays the closing attorney’s fees, though you may cover deed preparation costs, depending on the contract.
8. Attend the Settlement Conference
The closing, or settlement conference, occurs at the closing attorney’s office (typically 30–60 days from the contract’s effective date). You’ll:
Sign the deed and other documents to transfer ownership.
Receive the sale proceeds, minus commissions, taxes, and other costs.
Hand over keys once funds are verified.
The closing attorney calculates prorated items (e.g., property taxes, HOA dues) and disburses funds, including the due diligence fee and earnest money credited to the purchase price. For closing details, see the NCREC’s Real Estate Closing Brochure.
Who Pays: The buyer pays closing costs (e.g., lender fees, title insurance) and the down payment. You pay transfer taxes, agent commissions, and any outstanding liens or prorated costs.
9. Finalize the Sale
The closing attorney records the deed at the county Register of Deeds, completing the transfer of ownership. You’ll receive your proceeds via wire transfer or check, and the sale is complete.
Who Pays: The buyer typically covers recording fees.
Why and How the Closing Date Might Change
The closing date, set in the Offer to Purchase and Contract, is negotiable and typically occurs 30–60 days after the contract’s effective date. It can change due to:
Buyer Financing Delays: If the buyer’s lender needs more time for underwriting or appraisal, they may request an extension. You can agree or decline, but declining risks the buyer terminating during the due diligence period.
Inspection or Repair Delays: If the buyer requests repairs and they take longer than expected, both parties may agree to postpone closing.
Title Issues: Liens or disputes discovered during the title search may delay closing until resolved, requiring your cooperation.
Buyer or Seller Circumstances: Personal or logistical issues (e.g., your delayed move-out or the buyer’s scheduling conflicts) can prompt a mutual agreement to adjust the date.
Due Diligence Extension: If the buyer needs more time for inspections, they may request an extension, which could push the closing date.
To change the closing date, both parties sign an addendum to the contract, facilitated by their Realtors. Clear communication is essential to avoid disputes. If you refuse an extension and the buyer terminates during the due diligence period, you keep the due diligence fee but lose the sale. Breaching the contract could lead to legal action, though this is rare. For addendum forms, visit the North Carolina Realtors Forms Library.
Who Pays for What: A Summary
Seller:
Real estate agent commissions (5–6% of the purchase price).
Transfer taxes and deed preparation.
Repairs or concessions (if negotiated).
Prorated taxes or HOA dues.
Costs to resolve title issues, if any.
Buyer:
Due diligence fee (non-refundable, credited at closing).
Earnest money (refundable during due diligence, credited at closing).
Inspections, appraisals, and title searches.
Closing costs (e.g., lender fees, title insurance, attorney fees).
Down payment and recording fees.
Tips for a Smooth Home Sale
Price Competitively: Work with your Realtor to set a realistic price based on market data to attract serious offers.
Be Transparent: Provide accurate disclosures to avoid legal issues during or after the sale.
Prepare for Negotiations: Be open to repair requests or closing date adjustments to keep the deal on track.
Work with Professionals: A skilled Realtor and closing attorney will navigate North Carolina’s due diligence process and protect your interests.
Conclusion
Selling a home in North Carolina requires strategic preparation, from pricing and marketing to navigating the due diligence period and closing. Understanding terms like due diligence fees, earnest money, and the closing attorney’s role empowers you to make informed decisions. The Offer to Purchase and Contract (Form 2-T) provides structure, but flexibility and communication are key, especially if the closing date shifts. Partner with a trusted Realtor and cooperate with the buyer’s closing attorney for a seamless sale, and soon, you’ll be ready for your next chapter!
For more information, explore resources from the North Carolina Real Estate Commission or contact a local Realtor via the North Carolina Realtors’ Local Board Directory. Happy selling!
Disclaimer: This blog post is for informational purposes only and does not constitute legal or financial advice. Consult a licensed real estate professional or attorney for guidance specific to your situation.
