North Dakota Home Buying and Escrow Process


  • North Dakota's homebuying process is similar to other states where a closing agent (who is usually an attorney, escrow agent, or representative from a title company) is used to consummate the transaction and prepare all the closing documents.
  • In North Dakota, buyer and seller often consummate the transaction at the same closing (or 'settlement') table.
  • North Dakota has its own environmental features that may influence things like which types of insurance to get (their are many areas where hazard or flood insurance will be required by lenders)

Step by Step

Part 1: Disclosures, inspections, and title


  4. The buyer reviews and signs off on any disclosures. These disclosures vary based on property type, but often include things like known flaws with the property, prior improvements or repairs, and potential environmental hazards (including such minutiae as whether a methamphetamine lab has ever been present in the home) . A mandatory form called a Seller's Disclosure of Property Condition is provided by the seller on or before the day the contract is signed. Though it's mandatory (unless the type of property is exempted), sellers may see this as beneficial to themselves, and believe that buyers will build these pre-disclosed facts into the contract price (and thus sellers may be reluctant to provide any credits for these defects).
  5. If the house was built before 1978, a specific EPA-mandated lead paint disclosure will also be required, stating whether or not the seller has knowledge of any lead paint present on the property.
  6. The buyer elects to perform inspections on the property within a number of days from acceptance of the contract. This date can be referred to as the inspection contingency date. The types of inspections vary by property type and situation (and locale), but in North Dakota, a licensed home inspector generally inspects the home first, and other inspections and tests can be ordered if revealed to be necessary by the initial inspection. Failure to complete inspections and/or bring up any defects with the seller before the expiration of the inspection period is the same as waiving the inspection contingency. A property survey may also be ordered during this stage (many lenders will require it).
  7. If the buyer finds something unsatisfactory during inspections they can either accept the property as-is, or give the seller two options to respond: repair whatever problems were found and provide certification from an inspector that the problems have been repaired, or negotiate a settlement (such as closing cost credits) in lieu of making repairs. If no settlement is reached within a certain number of days (check your contract), then the buyer can declare the agreement null and void and recover their earnest money deposit.

Part 2: The mortgage process


  1. A buyer submits a loan application to their lender, either directly or through a mortgage broker. See a sample Uniform Residential Loan Application used in North Dakota. Of course, well before this point, a pre-qualification or pre-approval with a lender should have been acquired.
    • Explanation of any credit inquiries
  5. The financing contingency, or loan contingency, is removed by the buyer before the expiration of the loan contingency date, which is defined in the contract usually by specific date by which the buyer must provide a letter stating their loan status. The loan contingency is removed by sending a copy of their loan commitment to the seller's agent or designee thereof. Check your specific contract for guidance on what can happen if this date expires (as certain situations may allow for automatically extending the date), but if a buyer is rejected before the loan contingency date (provided they filed their application in a timely manner and diligently pursued their mortgage), they can walk away from the contract and recoup their earnest money deposit.

Part 3: The closing itself



