There are a surprising number of steps involved in a typical real estate transaction, and having at least some idea of what to expect before it all kicks off is sensible. Here are the main stages that you need to keep in mind, whether you are buying or selling property.
Make a purchase offer
To get any transaction underway, you need to make a formal offer which outlines the price you are willing to pay for the property and also defines the other terms that are relevant, such as how much time is allotted to the closing of the sale. This contract will be signed by buyer and seller alike, so long as there is unanimous acceptance of the conditions laid out within it.
Initiate escrow
Because of how much cash and complex documentation is involved in this type of transaction, escrow has been established as a means of keeping these important assets with a third party that has no vested interest in the deal from any angle. This protects buyers and sellers alike, and opening an escrow account is at the heart of all real estate transactions.
With the help of modern transaction management software for real estate, you can further protect yourself from any potential problems by keeping tabs on all of these important aspects and always having relevant information to hand.
Conduct inspections
Property inspections carried out by professional surveyors are a very useful tool for buyers who want to get the best deal and also avoid stumbling across some issue further down the line which was not immediately apparent before or during the transaction.
Inspections will take into account not only the state of repair of the premises, but also any other aspects of the land it sits on. These inspections can be costly and are not a requirement, but they are definitely worth using if you do not want any nasty surprises to emerge when it is too late to back out.
Get approval
If the inspections provide positive results or you have decided to renegotiate the purchase price according to the findings, the next step is for the buyer to seek approval from their lender for a mortgage to cover the agreed-upon amount.
Usually this process will be factored into the duration of escrow, with between 1 and 2 months allocated for the approval process. Of course this may differ depending on your circumstances, especially if you are buying commercial real estate rather than resolving a domestic transaction.
Close the deal
The agents and attorneys stewarding the deal will create the paperwork required to close a real estate deal, which will see the current owner hand over the title or deed to the buyer.
As this process comes to a close, other loose ends will be tidied up, with new owners receiving keys and other items relevant to their purchase.
With laws differing from state to state, getting expert assistance in any real estate transaction is a must, even if you have experience in this area.
If you’re also interested in the rental market, this guide is a useful starting point for landlord’s looking to learn about rental application laws.
Keep in mind, there is also bridge loan financing available.
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