The Life of a Transaction: A Step-by-Step Look into the Process
December 20, 2019
“The devil is in the details” is probably the most apropos quote when it comes to your real estate transaction. Many buyers may think of a real estate agent as merely someone who finds a home and writes an offer, but it is so much more.
While there is a pre-buying process that involves the lending pre-approval and searching for a home to buy, the real heavy lifting occurs when your offer is accepted and you begin to fulfill all the terms of the offer.
Think of your agent as the ultimate concierge. Within the confines of contract terms, your professional agent is trained to guide you each step of the way. Once you have found a home that you would like to make an offer on, here is what you can expect to happen next:
The first step involves ordering title insurance, setting up an escrow account for your earnest money deposit, and communicating your offer to your lender.
The next step, typically, is that you will conduct a professional inspection of the property so that you can be informed as to the condition of what you are buying. Sometimes this means you end up not buying because of the condition, and your skilled agent advises you how you legally terminate a contract and receive your earnest money back within your contract agreement. Oftentimes, the inspection contingency allows you to ask the seller to make repairs of items that are found on your inspection. Your agent works closely with you and your inspector and advises as well as crafts those additional terms that may be negotiated and agreed on as a result of the inspector’s findings.
Once the title report is received in advance of closing, your next step is to review the conditions or findings of the title report and make sure that it includes provisions for payment of the final taxes and any liens and encumbrances. Your review may include a meeting with the title officer to discuss any concerns and verify exactly what the title insurance covers you for. This is also your opportunity to read any attached documents that will transfer to you with the title. This may be utility easements, well and road agreements, or neighborhood covenants.
Next, the seller may have other terms to fulfill, such as pumping out the septic tank, providing HOA or other property information, etc. Meanwhile, your lender is busy at work collecting any outstanding items related to your loan and ordering an appraisal of the property. Your agent continues to monitor and confirm completion of the other contract terms, including collecting receipts for repairs, scheduling re-inspections if necessary, confirming appraisals are completed, etc. By the time you reach your target closing date, all of the contract terms have been fulfilled.
The last step of the process is that your escrow company (or sometimes an attorney) prepares the transfer deed, collects the closing signatures on the loan (if any) and funds from the buyer, pays the final settlement (such as property taxes, title and escrow fees, excise tax, commissions), accounting for all funds, and closes escrow. At this point, the final recording (or transfer of title) is made at the county recorder’s office. Upon recording, the transaction is closed, funds are disbursed, and keys are handed to the buyer! Success!
While every negotiation and contract is different, a professional agent understands the process and the many variables that come into play. They can easily adapt, advise and adjust the contract negotiations accordingly. The professional agent excels at helping you through this process, which includes identifying problems, resolving issues, finding solutions and referring reputable tradespeople to be service providers. Your closing success and satisfaction oftentimes depends heavily on the knowledge and the skill of your agent.