Henderson County's fast growing real estate industry has not only increased the business of builders and developers, it has also required more service from attorneys.


"With the average price of homes sold near $250,000, both buyers and sellers are making certain about their contracts and other documents," attorney John Parce said.

A Hendersonville native who is also on the Henderson County Planning Board, Parce explained there are no short-cuts in the legal process of transferring ownership. "We still pay careful attention to all the details," he said.

North Carolina law requires that deeds be written by attorneys, and since most property is transferred by deed, a seller needs to retain a lawyer to prepare one that is valid.

In most cases, a buyer will also want insurance from a title company, guaranteeing the quality of the title he is paying for. Again, state law requires that title opinions come from an attorney. The law further provides the opinion must be the work of an attorney independent of the title company involved.

Another definition that's important, Parce said, is that of "marketable title," which means a title so free from claims that a North Carolina court would accept it. "Marketable" implies a title that has been searched for claims during the past 30 years.

The search involves a review of public records that affect real estate, including deeds, court judgments involving the property, unpaid taxes, easements and use restrictions (such as zoning regulations).

A buyer's attorney will write his opinion on the quality of the title and, where appropriate, recommend purchase of title insurance.

An attorney's opinion, Parce said, won't protect a buyer against certain hazards not disclosed by public records -- things like forged deeds, fraud or undue influence in execution of deeds, and heirs not traceable through public records.

Also, the buyer is not protected by a title insurance policy written for the lender or for the previous owner. Insurance is protection only from the insurance company to a named insured, he said. If a buyer wants this type of protection, he should seek a policy insuring him by name. An attorney can advise the buyer about what risks he might be willing to accept.

An example might be a discrepancy in two surveys of a property. Most older surveys were made with optical surveying instruments, not as consistently accurate as those made with today's laser-based instruments. In this case, a new survey would settle the issue.

The procedure

Basically, Parce explained, transfer of ownership starts with a contract between the buyer and seller. It must be in writing because the subject is real property.

The document is usually prepared by a realtor, specifying the property, the price, terms of payment and signed by both buyer and seller.

If there is personal property involved, like a dishwasher, stove, drapes and such, these should be listed. If the purchase is dependent on the sale of the buyer's present home, the term and other conditions of this restriction should be included.

The purchase contract should specify who is to pay for closing fees and taxes on the property.

Except for new homes, the owner must provide the buyer a disclosure statement declaring the property is being sold with no hidden defects the owner knows about.

Among such defects can be environmental hazards like asbestos, radon gas, impure water or underground storage tanks. Another defect that might escape notice is an infestation of termites. Does the contract allow the buyer to check on these?

If the seller insists on delivering the property "as is," the sales contract should allow for inspections before the buyer obligates himself to buy the property.

Problems should be disclosed by the owner before the buyer makes his offer. If the offer has already been made, the buyer may choose to cancel it within the earliest of the following periods: (a) three days after receipt of the disclosure statement, (b) three days after the date of the purchase contract, or (c) at the closing of the sale.

Canceling the contract requires return of any money placed on deposit by the buyer. If there is a dispute over the return of a deposit, the realtor is required by law to retain the money until a written release from both buyer and seller is obtained.

The final step

The closing of the sale is when the buyer pays the price, or makes a downpayment on the price, and the seller gives him a deed to the property. It is the final step, the official transfer of ownership.

It's also the time, according to Parce, when the buyer can be assured that all terms of the purchase contract have been met by the seller, including the documents required of him.

Before money is paid, the buyer's attorney will assure him that the contract terms have been met, documents for financing are accurately prepared, the deed is recorded in the courthouse and that the buyer understands his obligations under the mortgage loan.

If the purchase contract provided for repairs to be made by the seller after the closing, the attorney should make certain enough money is placed in escrow to pay for the work.

Jim Wooldridge covers real estate, construction and growth issues for Homes Preview. Reach him at jwooley@bellsouth.net.