Many times there is legitimate seller financing provided by the developer of a real estate development project. When this is the case it means that the developer who owns the note files them legally with an attorney. In other cases people keep the promissory note, which is far more questionable. If the later is the case it will need to be researched thoroughly. In North Carolina this is a very complex topic legally.

Generally real estate transactions are written legal documents. The purpose of any written document is to document the terms and conditions between the parties concerned. Written documents that are drawn up by an attorney are best under North Carolina law. If pre-written forms are used as agreements ones that are approved by the North Carolina Bar Association and the North Carolina Association of Realtors can be helpful, though may need the review of an attorney before filing.

In legitimate seller financing traditional terms include financing contingencies, surveys, pest and other inspections, plus the specifics regarding title matters. There are more legal clauses that may need to be considered. Agreement structure and content vary as to whether a broker is involved or not and whether the transaction involves a buyer paying cash or a seller financing the purchase with a promissory note and secured by deed of trust or first mortgage. This is why under North Carolina law it is best to retain a lawyer in real estate transaction matters.

In attorney prepared documents there are clauses covering whether a cash sale or owner financing is occurring and any earnest money receipts required. In addition a Megan’s Law Notice is included and disclosure of any information regarding the presence of lead based paint or hazards.

Many times seller based financing limits the possibility of the seller’s recovery of a buyer’s default of the contract. The seller truly needs advice from an attorney before entering into a seller financing arrangement. The North Carolina Bar Association requires seller financed notes to be without penalty for prepayment and require seller’s approval for transfer or assignment.

Keep in mind that local title companies do not handle closings. Closings require a closing attorney regardless. There are many questions to ask of a lawyer prior to any closing. First there are the questions about appraisal and inspections of the property. Other questions involve the burden of fees and costs in this regards. Additionally it is important to know what an attorneys experience is in handling these types of transactions.

To secure legitimate seller financing it requires legal guidance and advice to navigate the complex requirements under North Carolina law, which realistically only an attorney can assist you with. This can be achieved through dealing with seller’s and developers that use attorneys to transact real estate and for buyers to retain their own legal counsel to achieve the best results