Real Estate Closings

After three or four years in which real estate sales have been extremely slow due to the severe recession, our local real estate market (by local, I mean York County, South Carolina and the greater Charlotte metropolitan area) is finally showing some signs of life. If you are a person, builder or business which is considering re-entering the market, what do you need to do or know, and what changes have taken place over the last few years?

At the beginning of the recession, this area had a huge backlog of houses on the market, and sales dropped to almost nothing. It took a long time for the inventory to sell, and many of the properties on the market were foreclosed by lenders. This huge inventory of distressed properties further depressed values, and lender owned properties became a major part of the local market. Unfortunately, many of the lenders were not prepared for the situation, and these depressed properties languished on the market. In addition, the federal government drastically changed laws regarding loan qualification, appraisal and other aspects of the closing process. What does a prospective purchaser need to do in today’s environment?

If you were buying stocks, your financial advisor would say “always buy quality stocks.” Buying real estate is analogous in some aspects. Since it is real estate, from our perspective as a law firm that has over 30 years’ experience in the local market, here are a few things we would recommend:

1. If you want to buy an existing home, get an experienced local realtor to assist you as a buyer’s agent, and check out the prospective realtors carefully to make sure of his or her reputation, and more importantly, that you can communicate effectively with such realtor, and that he or she is listening to what you want, and not trying to sell you something he or she has listed, so they can earn a larger commission. Be wary of an agent that only wants to show you properties he or she has listed, and consider hiring an agent who only represents buyers. If you have a friend or friends who have used a realtor recently, check with your friends for references.

2. Get pre-approved for a loan by a reputable lender before you even start the process. If you have good credit (roughly 700 credit score or higher), this should not be a problem.

3. Have an experienced real estate attorney review the proposed contract before you sign it. There is nothing an attorney can do to assist you on your contract if it has already been executed by both parties and you have paid your earnest money deposit before you contact the attorney.

4. Be sure your contract has provisions allowing you to have the property inspected for structural and other major problems (roof, foundation, termites, heating/cooling, electrical and plumbing), and that it has contingencies regarding financing, and the property appraising at or above the contract price.

5. Do your research regarding local real estate attorneys, as you have the right under South Carolina law to select the attorney you want to do the closing for you. Be careful of realtors who try to steer you to a particular attorney, because they may have a relationship with an attorney or law firm for a variety of reasons, some of which may not be in your best interests. There are many law firms in the area which are “closing mills” that do a large volume of closings referred from various sources. With some of these firms, the first and only time you may ever see or talk to the attorney is at the closing. If you want or need to talk to the attorney, and the staff seems to act like that would be difficult, if not impossible, then you should be wary of using such lawyer or firm.

Subject: York County SC Real Estate Law

Disclaimer: This article is for informational purposes, and it should not be relied upon as legal advice.