One to Buy, Two to Sell - -how does marriage impact the sale of property in NC?

In NC, there is a saying when it comes to selling property - “one to buy, two to sell”.

Generally speaking, in North Carolina, spouses who own assets prior to getting married take their assets with them when they go.

However, even in the cases of properties owned before getting married, if the property is sold, North Carolina law still requires a spouse to sign the deed to relinquish any martial interest they may have acquired by becoming your spouse.

Or another way of putting it, even though only one spouses’ name is on the title, two will generally be needed to sign the deed to sell.

This is because spouses have the right to claim an elective share if they survive their spouse, which is a legal benefit of marriage.

That is why if you enter into a listing agreement agreement to sell a property that has only in one spouses name, the real estate agent will likely ask both spouses to sign the listing agreement.

This is the general rule, there are always exceptions, and you should definitely contact an attorney for what applies in your particular situation.

Is the home seller required to pay off a loan on their solar panels?

According to the North Carolina Association of REALTORS, assuming that the Standard Offer to Purchase Form 2-T was used, the seller would be required to pay off the balance owed to the solar panel company, unless the buyer was willing to assume the obligation and an appropriate addendum to the contract is drafted by an attorney.

Paragraph 3 of Form 2-T, states that the seller agrees to convey all fixtures as part of the purchase price, free and clear of all liens, and solar panels would be considered fixtures.

The bottom line is that if a home includes solar panels that aren’t owned free and clear by the seller it’s important to make sure that there is a clear understanding between the parties regarding how the panels will be handled as a part of the transaction.

That understanding should be clearly reflected in the written contract between them. In addition, it would be wise, prior to going under contract, to be sure that the terms of the transaction are acceptable to the solar panel company and the buyer’s lender, where applicable.

Keep in mind - terms for the Standard Offer To Purchase Form 2-T change over time, so the answer in this example could change if the terms of the standard contract are updated. Always check with a licensed real estate agent for current guidance.

Is an email from a buyer’s agent enough to give notice of termination?

For example, a contract is approaching the end of the due diligence date, and an hour before the due diligence period is scheduled to end, the buyer's agent sends an email saying that the buyer is terminating the offer.

Is that enough to be considered effective?

The opinion of the NC Association of Realtors is more complicated than I expected. Their answer is ‘not necessarily’.

I would say that the answer is probably yes, but it would be best practice to do more than that.

Paragraph 20 of 2-T states that actions between parties can be conducted through electronic means, and that any notice required to be given to a party may be given to that party’s agent.

To avoid questions about whether the termination notice was actually authorized by the buyer, it would be best to have the buyer send an email to their agent that can be forwarded to the listing agent clearly stating that the buyer is terminating the contract.

Ideally, termination of an offer by a buyer should be done using a formal contract - Standard Form 350-T, and then sending that to the seller's agent. Signing the 350-T by itself is not enough, it needs to be communicated before it is effective.

Keep in mind - terms for the Standard Offer To Purchase Form 2-T change over time, so the answer in this example could change if the terms of the standard contract are updated. Always check with a licensed real estate agent for current guidance.

Is the due diligence fee an obligation of the buyer if they terminate their offer?

Is the due diligence fee an obligation of the buyer if they terminate their offer before they pay it?

For example: A home buyer's real estate offer is accepted and communicated by the seller. 5 minutes after the acceptance, the buyer changes their mind and terminates the offer before paying the fee.

Question: Is the buyer still obligated to pay the due diligence fee? It was only 5 minutes!

The answer: Yes - Based on the standard offer to purchase form 2-T

Not only is the buyer obligated to pay the due diligence fee, but if the Seller terminates the contract because of the buyer’s failure to pay the due diligence, the Seller could be entitled to recover the Due Diligence Fee together with Earnest Money Deposits as well as to recover reasonable attorney fees and court costs.

So if you have your offer accepted, and change your mind and terminate it, in most circumstances it will be best to pay the due diligence before terminating your offer, because you could end up paying a lot more if you don’t.

And of course, don’t make an offer unless you are really confident that you want to go forward with the transaction.

Keep in mind - terms for the Standard Offer To Purchase Form 2-T change over time, so the answer in this example could change if the terms of the standard contract are updated. Always check with a licensed real estate agent for current guidance.

Does a home buyer owe the earnest money deposit if the contract is already terminated?

For example: An offer to purchase is made on standard form 2-T. An additional earnest money deposit is scheduled to be paid at 5:00pm the day after the due diligence period ends.

Buyer terminates the contract the day after the due diligence period is over, but before the 5:00pm Earnest Money Deadline.

Question: Is the buyer obligated to pay the earnest money deposit to the seller?

Answer: Yes

Per the current standard form 2-T, the buyer must terminate the contract before the end of the due diligence period, or they will be obligated to pay the additional earnest money deposit.

In this example, the buyer terminated after the end of the due diligence period, so they were obligated to pay the additional earnest money deposit. You have to terminate the offer before the due diligence deadline to avoid being obligated to pay the earnest money deposit.

The only other ways that form 2-T allows a refund of an earnest money deposit after the due diligence period, is If the Property is not in substantially the same or better condition at Closing, or if there is a breach of contract by the seller.

Keep in mind - terms for the Standard Offer To Purchase Form 2-T change over time, so this example could change if the terms of the standard contract are updated. Always check with a licensed real estate agent for current guidance.