Buying a house in North Carolina is a major purchase. You'll want to determine what you can afford, which neighborhood will best suit you, and what features you need in a house, condo, or other type of home. But you'll also want to be aware of the legal issues inevitably involved, such as required disclosures by sellers, terms of your purchase contract, and potential title defects.
With proper preparation, careful choice of a real estate agent, and prudent use of other qualified professionals, buying a home in North Carolina can be a positive experience.
Are You Ready to Buy a Home in North Carolina?
You wouldn't be the first person to want to put down roots in a state that offers legendary hospitality, a reasonable cost of living, a strong job market, and normally mild weather, which is perfect for enjoying the state's many parks and recreation areas.
That's why, despite ups and downs in the national housing market, the North Carolina market has remained strong, with the median price statewide at $370,000 in late 2024. Unfortunately, such prices can make purchasing a home a challenge financially and otherwise, especially with the inventory of available homes low. In other words, you've got competition.
In light of that, you'll want to start by researching your local market (as you're starting to do here), visiting homes to get a sense of what's available in your price range (allowing for possible bidding wars that take the selling price way over the list price), and getting your finances in order.
Have You Saved Up for a Down Payment?
Traditionally, home buyers put down up to 20% of the purchase price on a home. Lenders like to see that much (and are delighted to see more), because it reduces their risk if you stop making your monthly payments or otherwise default and they then have to foreclose.
You've probably been setting money aside for a down payment already, but now is the time to ratchet that process up, and to avoid making any major new purchases (particularly on credit). After all, 20% of a home priced at the median in North Carolina is around $74,000. (Gulp.)
North Carolina also offers programs to assist with down payments or first-time home purchases.
Will You Need a Home Loan for the Purchase?
Assuming you'll need to take out a home loan (a mortgage), be sure to learn what's available, including government-backed options. Also check on your credit report, which will be one of the first things a bank or other institutional lender looks at, to see whether you're a major risk. You can view your report for free through annualcreditreport.com). The next important step is to correct any mistakes you find there.
Next, consider consulting with a mortgage broker to see what price range of houses you'll qualify to borrow money for. The broker can also help you obtain mortgage preapproval, which can be crucial if and when you're competing with other would-be buyers. You'll probably need to pay the mortgage broker a commission, in the 1% to 2% range, depending on the loan amount and other factors.
Particularly if money is tight, there's no shame in deciding that you'll want to keep renting for now. Another factor is how settled your life is. As a broad rule, the upfront costs make buying a house financially risky unless you plan to stay in it at least five years. If you're a natural nomad, or possibly interested in applying to schools out of state or looking for a new (non-remote) job, now might not be the time.
If you are ready to buy, though, you'll likely want to check in with prospective real estate agents, as described further below.
Where in North Carolina Do You Want to Buy?
Perhaps you already have a city, town, or even neighborhood in mind. If not, a number of resources will allow you to narrow your search, ranging from simple online searches such as "Is X a good place to live?" to sites such as bestplaces.
Before getting overwhelmed with all the data, it's worth creating a list of factors most important to you personally, such as:
- quality schools and universities
- gourmet or ethnic restaurants or groceries
- proximity to nature and culture
- excellent medical care
- coastal or inland location
- low crime levels, and
- thriving arts or crafts scene.
Many of these factors will increase your house's long-term value, too, thus making it a sound investment.
Advantages of Working With a Real Estate Agent in North Carolina
Some of the benefits of using a real estate agent to help you find and buy a North Carolina home include the agent's:
- knowledge of neighborhoods, average home prices, and market conditions
- ability to match homes to your needs and budget
- contacts with other professionals who can assist you in the homebuying process, such as mortgage brokers and home inspectors
- assistance preparing a viable offer and handling other paperwork, and
- key role in negotiating the final deal.
Your agent should guide you every step of the way, from drafting your written offer and negotiating with the seller on price and other key terms to coordinating the escrow process and house closing.
Luckily, working with a real estate agent might not cost you anything. Traditionally, the seller pays the entire real estate commission, between 5% and 6% of the house sale price, split between the seller’s agent and yours. Although recent court settlements might change this model, this hasn't happened yet.
Personal referrals from other home buyers are usually the best way to select a real estate agent. You can find licensed North Carolina real estate agents at the North Carolina Real Estate Commission’s Licensee Info Search. And sources like Zillow offer customer reviews of real estate agents.
Be sure the agent you choose has plenty of experience and an excellent reputation and references.
Requirements for North Carolina Property Disclosure Statement
State law in North Carolina (North Carolina General Statutes Section 47E-4) requires sellers to give prospective buyers a completed disclosure form. Its purpose is to provides details about the property and alert buyers to any known problems, for instance covering:
- defects in the plumbing, electrical, and other house systems
- the property’s water supply source and sewage disposal system
- conditions such as contaminated soil, the presence of asbestos, or pest infestation
- any homeowners’ association fees, and services provided in return, such as trash removal, and
- other specified details concerning the property, such as shared driveways or easements.
Disclosures must be made on a Residential Property and Owners' Association Disclosure Statement form established by the North Carolina Real Estate Commission.
Sellers need not tell you everything on this form. For starters, they're expected to disclose only what they know about (which might not be much). They can also opt to simply say "no representation" about an issue. Also, certain types of sales (such as newly built, never-inhabited homes) are exempt from state disclosure rules.
In addition to state-required disclosures, sellers of houses built before 1978 must comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website for details.
Importance of Getting a Home Inspection in North Carolina
Buyers should not rely solely on the seller's disclosures, particularly if the seller frequently opted for the "no representation" option on the form.
Instead, it's wise to hire an independent home inspector to produce a report on the house's physical condition. Many buyers make their offer contingent upon a satisfactory inspection report, to be sure that no material defects exist and to identify:
- termites and other pests
- soil settlement, drainage, or erosion issues
- noise and odor problems
- conditions that could lead to mold
- foundation and structural integrity, and
- the condition of the heating and cooling systems, electrical, plumbing, walls, drainage, basement, and flooring.
After you receive the report, you can either negotiate with the property seller over repair needs (almost every house has some) or cancel the sale altogether, if you're within the "due diligence" period.
If you're in such a tight market that you're tempted to waive (go without) the inspection contingency so as to make your offer stand out, do what you can to protect your interests in other ways. For example, you might bring a contractor or friend with relevant knowledge and skills to your house visits, so you'll have some idea of what you're getting yourself into. Some home sellers also commission their own inspection report before putting the house on the market, but they might not have chosen the most nitpicky inspector out there, so research that inspector's reputation before staking your future on the results.
Again, however, waiving the inspection contingency is a serious risk. The most commonly found issue by North Carolina home inspectors is a faulty roof: hardly an ideal risk to assume in a state known for hurricanes.
Real Estate Purchase Agreements in North Carolina
A purchase agreement is a legal document containing the terms and conditions of your real estate transaction. It must be in writing and signed by the parties (buyers and sellers) and include an offer to sell or purchase, an acceptance of the offer, the sale price, and an adequate description of the property.
The form will include many blanks to fill in, concerning things like internal deadlines for you to complete your "due diligence." This includes things like obtaining a property inspection and a mortgage loan (for which you'll also need a home appraisal), checking out insurance rates, and reviewing any governing documents if the property is located within a development governed by a homeowners' association.
The North Carolina Association of Realtors has prepared an "Offer to Purchase and Contract," which your agent can provide you with.
Dealing With Title Issues in North Carolina
A buyer should always obtain a title search from a title company before purchasing a home. The title company searches public records and other sources for any liens, easements (such as the utility company’s right to access part of the property), or other encumbrances or title restrictions that might affect the property. If the title search locates problems, the buyer should require the seller to correct these as a condition to closing.
Also consider purchasing a title insurance policy to protect your title to the property against adverse claims by third parties, or any clouds on the title missed by the title search. Mortgage companies usually require buyers to purchase a title insurance policy in connection with obtaining a home loan.
Working With a Lawyer in North Carolina
Unlike in many states, North Carolina law requires sellers to involve a lawyer in the house closing and other aspects of the real estate transaction. (For details, see the North Carolina State Bar ethics opinions that set that out and describe what non-attorneys may do in the real estate transaction process: Authorized Practice Advisory Opinion 2002-1 and 2002 Formal Ethics Opinion 9.)