Norman Legal, PLLC

12/04/2023

The Corporate Transparency Act goes into effect on January 1, 2024. Every LLC will be required to file a beneficial ownership form or risk being fined $500 for every day the form is late. Make sure to take care of this to avoid penalties!

Episode owners and anyone who owns real estate: TUNE INTO THIS EPISODE! Today, we’re talking to Brandon Hall, CPA, about an urgent change affecting E...

10/24/2023

Always make sure your contractor is licensed and insured before signing a contract.

There is a new rule for unlicensed contractors in North Carolina, which means you now even have to be even more careful when hiring someone to do any work.

10/16/2023

These are interesting data points for Meck County. 20% fewer homes sold month over month, but a majority of those sold were sold for under asking price, while a third are still going for more than list. It's a strange dichotomy.

Data Source: https://www.rockethomes.com/real-estate-trends/nc/mecklenburg-county?type=buyer

05/27/2020

We continue to observe social distancing guidelines to the extent possible, which means limited office hours remain in effect for the foreseeable future. As a result, if you have an urgent issue that cannot be resolved online or by phone, please call ahead to setup an appointment or confirm someone is available at the office before stopping by. Thanks, and stay safe!

06/13/2019

We're here to help you get what you want!

06/08/2019

Home Buying Pitfalls

05/16/2019

Common Closing Pitfalls, continued.

Issue #3: Financing Fallout

This happens with relative frequency, particularly when sellers accept contracts for buyers who are pre-qualified, rather than pre-approved. This sounds like a distinction without a difference, but it really matters.

If your buyer is pre-qualified, that does not mean the lender has agreed to fund their loan. It simply means that the borrower has submitted information to the lender, and based on a brief review of the unverified information received, the lender has pre-qualified the borrower. It is entirely possible, even likely, that the lender will not ultimately approve this borrower for any number of reasons. They may have overstated their income, they may have lied about the length of employment, they may already have a mortgage, their debt to income ratio might be too high to qualify for a large enough loan to cover the cost of the home. There are countless variations that could result in a borrower not being approved, even if they are pre-qualified.

In order to protect yourself from this pitfall, it is best to only enter into contracts with borrowers that are pre-approved. This means that the lender has verified their information, reviewed an actual mortgage application, evaluated their credit score and credit history, and now have a more accurate and reliable picture of whether this borrower will ultimately be approved for the loan by the underwriter.

That being said, there's nothing in the world you can do to protect yourself from the borrower who goes out the day before closing and spends their cash to close on a new BMW. But you CAN protect yourself against the wasted time of entering a contract with an unqualified borrower who might not be able to finance the home by requiring a pre-approval letter prior to signing.

05/16/2019

Common Closing Pitfalls, continued.

Issue #2: Final Walk-through

This is typically an issue of miscommunication of expectations.

About a week before closing, the buyer will do a final walk-through of the property to make sure it is in the same condition, normal wear and tear excepted, as it was in when they agreed to purchase it. If during this walk-through, the buyer was expecting to see a refrigerator and stove, but those items are missing because the seller did not intend to convey them with the property, then problems will inevitably arise.

Also, if certain repairs were agreed to, but those have not been completed by the time the final walk-through is conducted, this can also delay closing or possibly result in a cancelled transaction.

Given the substantial monetary and opportunity costs involved in listing and negotiating a sale, having a last minute delay or cancellation is a terrible outcome for both sides.

In order to avoid this, it is imperative that the contract be explicit in listing property that will remain on the premises after the sale. This typically would list any item that the buyer expects to get with the purchase that is not considered a 'fixture'. To determine if an item is a fixture, use the following test. Ask yourself, 'can this item be removed from the premises without damaging the structure itself?' If it can, then it is not a fixture, and should be listed in the contract as an item to be conveyed with the house.

Typical examples of things that are 'fixtures' are A/C units, water heaters, lighting fixtures that are attached to the wall, television wall mounts, garage door openers, and things of that nature. Things that are NOT fixtures would include items like refrigerators, microwaves (if they are not built-in to the cabinets), stoves, or bathroom mirrors that are not glued to the wall.

When you hire an attorney to handle your closing, the first thing they should do is review your contract documents. This includes reviewing the items listed as personal property to be conveyed, and discussing with you whether those items include everything you expect to get with the purchase. If not, the contract should be amended to include all the expected items so that you aren't surprised at final walk-through when the entire kitchen has vanished.

This should be done as early as possible, preferably during the due diligence period. After that period has expired, if the seller does not agree to modify the contract to include the items you expected to receive, you will lose your earnest money deposit if you cancel the contract.

05/16/2019

Common Closing Pitfalls

Clients often ask me what problems they might run into when preparing to close a deal, so I've decided to create a series of posts about the most frequent causes of delayed closings in order to bring awareness to these pitfalls.

Issue #1: Liens or Debts

11% of closing delays are a result of outstanding
liens or debts that crop up at the last minute
unexpectedly. These must be satisfied, resolved, or
approved before or at closing in order for sale to
complete.

For a seller, these issues will show up in the title search a few weeks prior to closing, and should be brought to your attention by your closing attorney. If your attorney misses the issue, the buyer may find them at the last minute and delay closing until the issue is resolved. This is why having competent legal counsel is imperative. A missed lien can cause a cascade of headaches, or even result in the deal being called off.

For a buyer, these issues will be raised by your lender. I have seen these issues come up the day of closing, so if you're aware of any potential debts or liens that the lender doesn't know about, or you aren't sure whether the lender knows about it or not, you should tell your loan officer immediately. Otherwise, you could lose your dream house because if the sale doesn't close on time because the lender will push back closing until they resolve the issue and put your loan back through underwriting.

The takeaway from this is that if you know about an outstanding lien on your property or a debt that you owe, you need to disclose it as early in the process as possible. This will allow your representatives to appropriately address the issue well in advance of closing, and will prevent delays or cancellations. If you're thinking that it won't come up, it will. Most of these types of problems can be resolved relatively painlessly UNLESS they happen at the last minute. It's always in your best interest to be as transparent as you can be.