Homeowner guide
Sell-and-stay offers and North Carolina law
If someone offers to buy your home and let you keep living in it, North Carolina has a specific statute governing that transaction: Article 5A of Chapter 75.
We should say up front that we are part of this business. We work with investors who purchase homes in North Carolina, including structured transactions where homeowners remain in the property, and some investors share common ownership with our company. That is why we know the statutory standards in detail. The law applies equally to all private operators, and homeowners are entitled to full compliance.
What a sell-and-stay agreement is
In a sell-and-stay transaction, a homeowner conveys title to an investor, proceeds resolve the default to stop foreclosure, and the homeowner continues residing in the property as a tenant or under a lease-purchase agreement.
These structures can be legitimate. For homeowners with meaningful equity, stable income, and strong reasons to stay in their neighborhood (such as school districts or family care), a properly executed agreement can provide a stable transition and protect equity.
The structure itself is legal under North Carolina law, provided the transaction adheres strictly to the statutory requirements of Article 5A.
How an abusive equity-strip deal works
Unregulated or predatory rescue schemes often disguise equity extraction behind helpful promises.
The transfer happens at a fraction of what the home is worth
Often just enough to clear the existing mortgage balance. The equity you built transfers to the buyer along with the deed.
The rent is set higher than your original mortgage payment
Manageable in month one, but unsustainable over several months, which creates immediate eviction vulnerability.
The buyback price is set out of reach
Substantially above what the buyer paid you, often with added transaction fees and unrealistic financing deadlines.
One late payment ends your rights
Once you become a tenant, missing rent does not trigger a foreclosure process. It triggers summary ejectment (eviction), which is faster and carries fewer homeowner defenses.
You risk losing both the house and your equity
Standard purchase contracts without statutory safeguards can permanently extinguish your ownership rights.
What North Carolina law requires
Article 5A of Chapter 75 defines a foreclosure rescue transaction when all three of these conditions are met:
Principal residence
The real property serves as the primary residence of the homeowner.
Representation of relief
The buyer or their representative states the transfer will prevent, postpone, or resolve foreclosure and permit continued occupancy.
Retained interest
The homeowner retains a tenancy, lease with purchase option, or right of reacquisition.
The statute applies broadly to anyone who organizes, promotes, solicits, or assists with a covered transaction for compensation or financial expectation.
Source: N.C.G.S. §§ 75-120 to 75-122 (Article 5A, Home Foreclosure Rescue Scams). Official statutory text published by the North Carolina General Assembly.
The statutory transaction checklist
Three requirements govern pre-closing delivery. Seven mandatory terms must appear directly within the written contract.
Pre-closing requirements
An appraisal by a licensed certified appraiser
Not a comparative market analysis, not a website estimate, and not the buyer’s opinion. An appraisal by a North Carolina certified appraiser.
Performed no more than 120 days before the transfer
An older appraisal does not satisfy the statutory requirement, regardless of when it was delivered to you.
Delivered to you at least seven days before you are obligated
Seven full days before signing or becoming legally bound, giving you adequate time to review the figures and consult counsel.
Required contract terms
The contract must be in writing, signed and acknowledged by all parties, and include:
The names and addresses of every party to the contract
The complete legal description of the property being transferred
Any existing debt of yours that the buyer agrees to assume
The total consideration and purchase amount paid by the buyer
The fair market value as determined by the certified appraisal
The exact appraised value must be stated directly in the contract document.
A clear description of the possessory interest you retain
Your tenancy terms, lease-option rights, or formal repurchase option written out in full.
The exact terms governing your right to future ownership or possession
Clear terms specifying what price and timeline govern any repurchase option.
Payment threshold: The buyer must pay at least 50% of the certified appraised fair market value at or before closing. Under North Carolina law, 50% represents the mandatory statutory minimum floor.
Statutory exemptions
The provisions of Article 5A do not apply only when the buyer falls into one of four narrow statutory categories:
Your immediate family
A transfer to a qualifying immediate family member under NC law.
A government agency
Federal, state, or local government agencies or housing authorities.
A bank or credit union
Regulated banking institutions and their operating subsidiaries.
A licensed mortgage lender or servicer
Entities licensed under the North Carolina Commissioner of Banks.
If you have already signed an agreement
If an existing transaction failed to meet statutory requirements, you have clear legal remedies under state law.
Legal remedies available
Violations of Article 5A constitute an unfair and deceptive trade practice under N.C.G.S. § 75-1.1, which allows for potential treble damages, attorney fee recovery, and equitable relief to void non-compliant transfers.
Statutory protections remain available
Prompt legal action is essential
If a buyer conveys title to a subsequent bona fide purchaser, reversing the transaction becomes substantially more complex. Consult an attorney promptly to evaluate your rights.
Consult a licensed attorney without delay
If you believe an agreement you entered violated North Carolina foreclosure rescue statutes, provide your paperwork to a licensed North Carolina real estate attorney or contact Legal Aid of North Carolina for guidance.
Where to access free homeowner resources
These independent organizations provide free, confidential assistance to North Carolina homeowners.
HUD-approved housing counselors
Free foreclosure prevention counseling available to all North Carolina homeowners.
NC Housing Finance Agency
State-administered homeowner assistance programs and counselor network.
Legal Aid of North Carolina
Free civil legal representation for qualifying lower-income homeowners.
Your county Clerk of Superior Court
Your court docket is public record. The Clerk’s office can confirm all scheduled hearing dates and filings.
Keep reading
Cash offers on your home
How to verify whether a cash buyer can close, and key terms to require in writing.
Read this →Already signed?If you are already under contract
What to do when a buyer has gone quiet and your court date is approaching.
Read this →The whole boardAll of your options
Every path available to a North Carolina homeowner facing foreclosure.
Read this →This page explains what North Carolina law says. It is not legal advice, and no page can substitute for a lawyer who has read your contract and your court file. Free HUD-approved housing counseling is available to every North Carolina homeowner at no cost, and legal aid may be available depending on your income.