Understanding The Basics Of A Real Estate Transaction
Falling in love with your dream home is one thing, but understanding the ins and outs of a real estate transaction may seem like a completely different kettle of fish! The truth is however, that understanding the basics of how real estate transactions work does’t need to be double dutch. In fact the whole process can seem quite easy to grasp once the main elements have been outlined.
Interested in knowing a little more? No problem! Here come the main elements involved in a real estate transaction. We’ve given you enough detail to explain things, but not enough to bore you to death!
Step 1 – An Offer Is Made And A Contract Is Drawn Up
Once you’ve decided on a property you make an offer and sign the bottom line of a contract. This legally binds you to the purchase. That being said most contracts are subject to certain matters, such as loan approval, disclosure review and appraisals.
Step 2 – The Disclosure Review
All sellers are obligated to provide the buyer with disclosure documents. Such documents may include a preliminary title report, local documents specific to the area or copies of city reports.
In addition, by law the seller must disclose any problems or issues related to the property which would have a bearing on either the value of the property or how appropriate it is for habitation.
Since your contract will be subject to such disclosures, the appearance of unanticipated flaws or problems with the property gives you an opportunity to legally end the contract if you so wish.
Step 3 – Appraisal
Your lender for the house purchase now comes into play. It is their job to ensure that the sale price is correct. As the buyer, you will foot the bill for the lender to send out a third-party appraiser. The role of the appraiser is to ensure that the sale price is right for the area and property type.
Step 4 – Inspection Time
Now its time for you to engage the services of a property inspector. All of the main systems and features of the property will be inspected, and if necessary a specialist may be recommended to examine a troublesome finding.
If the inspection does show up a few issues, but you are still keen on the property, then it may be possible to come to some sort of agreement with the seller.
Step 5 – One Last Check
Just before the sale goes through, it’s time to take one final walk-through of the property. Make sure that everything is as it was when you last viewed the house, for example check that all fixtures are still in place and that any rubbish that was to be removed has already disappeared.
Step 6 – Time To Close The Deal
Depending on the attorneys who are being used, as well as the area you live, you may sign in the presence of the seller, or may not even meet face to face.
Whatever way the closing happens, the final result will be one and the same; you’ll sign a lot of documents (especially if you’re buying with the help of a loan). Just before the sale is closed you’ll receive a closing statement which will outline all of the final figures.
At this point the money will be transferred and the deal will be done.
Certainly buying and selling property may seem like a daunting task, however by understanding the basic elements to a real estate transaction, the whole process can seem a lot less complicated!