June 12, 2012
Ocracoke Real Estate:
The role of agents is no small thing in buying and selling
By B.J. OELSCHLEGEL
feel lucky to be able to say that I am representing a buyer in a
contract for the sale of a piece of real estate. While the market had
been deathly quiet, we have been seeing more activity since about
August of 2011. Our buyers are staying in the range of below $400,000.
The turn in the economy has to start somewhere and I am happy to see
The signing of a contract is preceded by some verbal back and forth of
negotiation. An agent sighs with a little relief once the signatures
are on the contract, but really it is just the beginning of a steady
stream of details that require everyone’s attention.
The contract copies are accompanied by a lawyer’s worksheet and mailed
to the lawyers chosen by each party. This worksheet provides contact
information for all parties to the contract, the bank, the home
inspector, surveyor and the pest control company. The contract
contingencies are spelled out for both lawyers.
A buyer may have contacted a mortgage banker about the possibility of a
loan, as they began the process of looking at properties. Now, with a
verbal acceptance, the buyer starts the ball rolling on the loan
The signed contract is forwarded to the banker. The buyer gets
qualified for the loan and then the property has to qualify. The
appraisal, title search, and flood insurance are the major hoops for
qualifying the property.
The appraisal is arranged by a third party organization. Neither the
agent nor the banker can affect the outcome. The title search and
subsequent insurance are handled by the lawyer for the buyer. The
attorney is looking for anyone else who might have some ownership or a
lien on the parcel. The lawyer is protecting the buyer by looking for
any defects in the title to the property. For flood insurance, one
needs an elevation certificate to validate the height of the building
above the base flood of 6 feet. An insurance agent will write the
The seller’s attorney needs to prepare the deed and present it to the
buyer’s attorney for review. The seller’s attorney will then hold it in
his or her safe until the day of closing. They will also review the HUD
statement prior to closing to verify all of the money coming in to the
closing and expenses paid out of the closing. Their job is to protect
the seller and guarantee that the conditions of the contract are being
met. The seller’s attorney has the lightest work load.
The buyer’s attorney is responsible for the bulk of the work in getting
to closing, such as the title work and preparing the note and deed of
trust for the buyer, according to the instructions of the bank. When
the buyer borrows money from the bank to buy the house, he or she signs
a promise to pay what is called a promissory note. The deed of trust is
the document which secures the debt for the bank by using the house as
the collateral for the loan.
The buyer’s lawyer also prepares the HUD. This document is written by
the U.S. Department of Housing and Urban Development and is defined as
a standardized settlement statement to be used in all residential real
estate closings. The “HUD,” as we refer to it, is subject to a piece of
consumer protection legislation called RESPA. All lenders must provide
their buyers with specified information with regards to their
transaction -- the buyer has the right to know. The lawyers for both
parties are charged with the responsibility of correctly preparing and
reviewing the HUD.
On top of everything else, the buyer’s attorney orchestrates the
closing, actually securing the signatures on all of the buyer’s closing
documents, receiving the signed deed from the seller’s attorney,
cutting the checks to pay off the seller’s existing loan on the
property or to pay the real estate commission or to pay the pest
control company as examples. The buyer’s lawyer also immediately
registers the deed in the courthouse after closing to protect the
The loan and the legal documents are the big stuff in a real estate
transaction, handled by the banker and the lawyer. All the other
details and contract contingencies plus the monitoring of the big stuff
are the responsibility of the real estate agents.
The agent might be the one to spur the buyer to start the loan process.
A normal contingency in a contract would be a commitment letter from
the bank, qualifying the buyer for the loan. It would be the agent
pushing the bank for this letter. This letter provides an assurance to
the seller that this deal is one big step closer to going to closing.
When the house gets appraised or inspected, it would be the agent who
works to get the service provider into the property. Just imagine what
it looks like when the home inspector finds something that is less than
positive about the house. The two agents step in to work with the buyer
and seller on getting to a mutually agreed upon resolution.
When it comes time for the insurance to be quoted, it often is the
agent who would call for the elevation to be shot or would take
pictures of the property for the off-island insurance representative.
We call for the pest/termite inspection but have to time it to occur not more than 60 days before closing.
The agents have to work together to make the change over in the
property management. Rents have been collected and prepaid to the
seller for rental periods that were occurring in the future. Think
about the utility accounts and services which have to be adjusted. The
agents have to get sellers to sign off on certain accounts and get
buyers to make application for their own utility accounts. We schedule
the reading of the water and electric meters on the day of closing.
Lawn care and trash pickup choices have to be made. Any personal
property that the seller is keeping has to be removed prior to the
sale. Knowing that the county needs a little help with their systems,
one of the agents will send out transfer letters to the health
department and the tax office notifying them of a change in ownership.
We have to collect all of the keys to the house and make sure that they
get to the new owners.
After the initial bump of having a signed contract, the sale process
enters into a “due diligence” period. This is an agreed upon amount of
time where the buyer can evaluate the prospective property and decide
to continue with the purchase or to walk away, with the return of the
This time frame feels like you have been climbing a very steep hill.
You are never quite sure if a deal is really going to happen. Buyers
have to get qualified and then the property takes a turn. And then,
finally, you reach the peak. A decision to proceed is made by the
buyers. You start heading down the other side. It becomes a matter of
lining up all of the details. There can be a lot of details, many
specific to the property.
After 30 years of selling real estate, I have created a check list of
every closing detail I can think of. I use highlighters to distinguish
the immediate from the not so urgent. There is the pleasurable act of
crossing off yet another detail from the list.
I remember the words of acknowledgement from one buyer who became a
friend after the sale. She confessed that she really had no idea how
much the agent handles in a real estate closing. She was thankful for
the guidance. How could she have known? Buying a house is something
that most people only do once or maybe twice in their lives.
I chuckle to myself when I hear someone say that real estate agents
just kick back and wait for the checks to come in. That is so not true.
Oelschlegel has lived on Ocracoke Island for more than 30 years and has
worked in the real estate business for almost as long. She is a
broker with Ocracoke’s Lightship Realty and a real estate columnist for
The Ocracoke Observer. You can reach her by e-mail at [email protected])