Steps in a Real Estate Transaction

The steps in a real estate transaction can vary depending on the specific circumstances of the transaction and the laws and regulations in the relevant jurisdiction. However, here are some of the common steps in a typical real estate transaction:

  1. Pre-approval: The buyer obtains pre-approval for a mortgage loan from a lender before viewing homes with an agent.
  2. Property search: The buyer searches for properties that meet their needs and budget based on the pre-approval.
  3. Offer and negotiation: The buyer makes an offer on a property and negotiates the terms of the sale with the seller, including the purchase price, closing date, and any contingencies.
  4. Contract signing: The buyer signs and submits an offer to include purchase price and any contingencies.
  5. Escrow: Buyers pay the agreed amount into escrow within a due diligence period.
  6. Home inspection: The buyer hires a professional home inspector to examine the property and identify any issues that need to be addressed within a due diligence period. The real estate agent can provide a list of home inspectors and schedule the inspection appointment.
  7. Appraisal: The lender orders an appraisal of the property to ensure that it is worth the amount of the loan.
  8. Title search and insurance: The buyer obtains a title search to ensure that the seller has the legal right to sell the property and purchases title insurance to protect against any issues that may arise with the title. The real estate agent can provide a list of title companies and will submit all contracts and addendums to the title company. They will stay in constant communication to provide any additional information.
  9. Closing: The buyer and seller meet with a closing agent or attorney separately to finalize the sale. The buyer pays the down payment and closing costs, and the seller transfers ownership of the property to the buyer.
  10. Recording: The sale is recorded with the relevant government agency to ensure that the buyer is recognized as the legal owner of the property.

These are some of the general steps involved in a real estate transaction, but the specifics can vary depending on the circumstances. It is important to work with experienced professionals, such as a real estate agent, attorney, and lender, to ensure that the transaction is handled correctly and efficiently. It can be costly if the transaction is managed correctly or timely!