Settlement Service Companies v. Real Estate Lawyers
Real estate lawyers here in North Carolina are asked frequently why buyers should use their services to purchase their homes instead of settlement services companies. What value is being added by having a lawyer involved? The short answer is that you can have an attorney represent your interests at a real estate closing without incurring any additional cost. The long answer is that an attorney can provide you with additional benefits that a settlement services company cannot simply because only attorneys may provide certain services in the State of North Carolina.
First and foremost, in North Carolina only an attorney can provide you with professional advice regarding your closing documents. In real estate closings in this day and age, you rarely have the opportunity to review your loan documents prior to the closing. Everyone says, “always read before you sign,” but you don’t usually have the opportunity. And if you are provided the documents beforehand, can you understand all the legal jargon? Here is language from a deed of trust (actually, it’s from the mortgage on my house):
As used in this Section 18, “Interest in the Property” means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument.
We are frequently asked, “Does this mean when I die my children will have to pay off the mortgage?” In North Carolina, only a lawyer can answer this question.
The only role that employees of a settlement services company can serve legally is to identify the document being presented and point to where you should sign. This is a deed of trust; sign here and here.@ Is this helpful to you? I bet you would like to know that the Garn-St. Germain Act prohibits a lender from accelerating payment owned on a mortgage because the owner died and left it to his children. Only a lawyer can provide that information at a closing.
Additionally, in North Carolina, only an attorney may certify the title to real estate and provide you with professional advice regarding the status of that title. If your lot has a drainage easement along the northern boundary, would you like to know if you can erect a fence within that easement? Can you use a lot in a neighboring subdivision for a driveway into your adjacent property? Will an unsatisfied deed of trust upon your property affect its marketability later down the road when you want to sell it? These are questions for a real estate lawyer in this State.
It may surprise you to know that a real estate closing in a lawyer’s office costs no more than a closing with a settlement services company. That’s right; you get your own lawyer – one with malpractice coverage and regulatory oversight by the North Carolina State Bar – who can explain the documents you are signing, the status of the title to your property and any questions of a legal nature that you may have without paying any additional funds. Why would you have your closing – the largest financial transaction of your life – anywhere else?