6 Things You Should Never Agree To When Buying a Home in North Carolina

When you are buying a home there are a few things you can agree to, or quietly give up, that feel harmless in the moment. You initial a box. You do the seller a favor to keep the deal moving. You forget about it.

Six of them are worth refusing. Do not waive owner title insurance. Do not waive or shrink your due diligence period. Do not sign a custom contract without an attorney reading it. Do not rely on a verbal side agreement. Do not skip the appraisal contingency unless you have the cash. And do not close on a known problem without either fixing it on paper or getting paid for it.

In the video below, North Carolina attorney Tiffany Webber walks through each one, including the buyer who skipped the survey and found out the property line ran about two thirds of the way through his house.

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1. Never Waive Owner Title Insurance

When you buy a home with a loan, your lender requires title insurance. Most people see that line, see that it is already required, and figure they are covered. You are not.

That is a lender policy, and it does exactly what the name says. It protects the lender, up to what you owe them. It does nothing for you.

So picture this. You close, you move in, and a year later something surfaces in the history of the property. An old lien nobody caught. A previous owner heir with a legitimate claim to part of the land. A boundary problem that was never resolved. That is a title defect, a problem with the ownership history of the property you bought. With only a lender policy the bank is protected, and cleaning it up is entirely on you, on your own dime. Those fights are not cheap.

The fix is a one time cost at closing. And to be clear about how it works here, in North Carolina closing attorneys cannot sell title policies. That fee goes directly to the title insurance company.

2. Never Waive Your Due Diligence Period

Here in North Carolina, when you go under contract you get a due diligence period. That is a window where you get to investigate the property however you want. Inspections, surveys, appraisals, asking questions, all of it. During that window you can walk away for any reason or no reason and get your earnest money back.

That right has a deadline, and in a competitive market buyers get talked into giving it up or shrinking it to almost nothing to make an offer look stronger. It feels like a small thing to hand over when you are trying to win the house.

The minute you waive the due diligence period, your earnest money stops being refundable. Terminate after that and the money does not come back to you. It goes to the seller. And we are not always talking about small numbers. During the craziest stretch of the market we got a contract where the buyer had put up the entire purchase price as due diligence money. That deal closed, thank goodness, but that is how much can be riding on these terms. There is more on how the timeline works in our day by day due diligence timeline.

3. Never Sign a Custom Contract Without an Attorney Reading It

Most home purchases in North Carolina run on a standard form, the Offer to Purchase and Contract. It gets reviewed and updated regularly to stay fair to both sides, and it is a good balanced document.

Every now and then, instead of that form, a seller hands you their own custom contract and presents it like it is the same thing. A contract is a contract, right? Not even close. If someone took the time to draft a custom contract instead of using the standard one, it was almost certainly written to favor whoever drafted it. That is not illegal and it is not wrong, but you need to know it.

The dangerous part is usually not the language you can see. It is the rights you assume you still have that got written out. Even with a standard form, if you have questions, have somebody walk you through it. At a minimum, understand what you are agreeing to before you put pen to paper.

4. Never Rely on a Verbal Side Agreement

This one trips up good, trusting people all the time. You are working through the deal and the seller says do not worry, I will leave the refrigerator and I will get that back fence fixed before you move in. You shake on it, you feel good, you move on.

If it is not written into the contract, it may be worth nothing. Once a contract is in writing and contains a clause saying it can only be changed in writing, a verbal side agreement does not modify it. The standard Offer to Purchase here in North Carolina says exactly that. Any change has to be in writing to be binding.

So the handshake about the refrigerator and the fence can legally evaporate. If you are going to agree to something, anything, put it in the contract or in a written addendum. A promise you cannot enforce is not really a promise.

5. Do Not Skip the Appraisal Contingency Unless You Have the Cash

Say you agree to pay $400,000 for a home. Before the lender funds the loan they send an appraiser to confirm the home is worth what you are paying, and the appraisal comes back at $380,000.

An appraisal contingency is the protection that lets you renegotiate or walk away when the home appraises for less than you agreed to pay. Not every contract has one. In North Carolina the standard form does not include it. It has to be prepared and added as an addendum when you present your offer.

Watch what happens without it. Your lender will only lend based on the lower appraised value, the 380, not the 400 you agreed to. You are still legally on the hook for the full price. That $20,000 gap does not disappear. You bring it to the table in cash on top of everything else, or you are the one in breach.

6. Never Close on a Known Problem Without Fixing It or Getting Paid for It

Sometimes a real problem shows up during due diligence. An encroachment where something sits over a property line. A setback violation where a structure is built closer to a boundary than the rules allow. Work the seller did without ever pulling a permit. A pier added to the water that was never allowed to be there.

When you find one of these, especially if you are already attached to the house, there is a powerful temptation to close anyway and tell yourself you will deal with it later.

The second you close, that problem stops being the seller problem and becomes yours, legally and financially. The seller got paid and moved on. You own the violation and everything it costs to fix.

We know of people who built a $30,000 workshop and had the county make them tear the whole thing down over a setback issue. About five years ago we got a call from someone who skipped the survey and found out after closing that the property line ran about two thirds of the way through his house. His home was built partly on the neighbor land. We have watched a fence six inches over a line turn into a $5,000 problem. These are not rare dramatic stories, we see versions of them all the time.

You can sometimes still close on a house with one of these issues. If you do, you either get a legal document recorded that fixes it, something like an encroachment agreement, or you negotiate a price reduction or seller credit that actually covers what the fix is going to cost. Close with the problem unfixed and no compensation, and you have signed up to carry it alone.

Watch the full video for all six, including the due diligence story and what an encroachment agreement actually does.

Common Questions

Is owner title insurance required in North Carolina?

No, it is optional for the buyer. The lender policy is usually required with a loan, but it protects the lender only. In North Carolina the closing attorney cannot sell title policies, so the premium goes to the title insurance company.

What happens if I waive my due diligence period in NC?

Your earnest money stops being refundable. If you terminate after the due diligence period ends, the earnest money generally goes to the seller, and the due diligence fee you already paid is not coming back either.

Does the North Carolina standard contract include an appraisal contingency?

No. The standard Offer to Purchase and Contract does not include one. If you want that protection it has to be added as an addendum when you make your offer.

Are verbal agreements with a seller enforceable in North Carolina?

Generally not, when the written contract says changes must be in writing. The standard form says exactly that, so a handshake about repairs or leaving appliances needs to go into the contract or a written addendum.

Who is responsible for an encroachment discovered after closing?

You are, as the new owner. That is why an encroachment found during due diligence should be resolved with a recorded agreement or paid for through a price reduction or credit before you close.

Buying in the Lake Norman Area?

At Thomas & Webber, we review the contract, run the title search, and flag the things that need to be handled before closing rather than after, when they become yours.

Our offices in Mooresville, Cornelius, Denver, and Kannapolis serve buyers and sellers throughout the Lake Norman area, including Davidson, Huntersville, Sherrills Ford, Troutman, and Statesville.

Email your contract to [email protected] or call us at (704) 663-1600 to schedule your closing with us.