The Real Estate Transfer
Though it is 2019, we still have kings and queens. We have kings and queens from royal bloodlines who own basically whole countries, but on the other hand, we have kings and queens (landowners) who own parts of their neighborhoods. The term real estate actually comes from the Spanish word “real“, meaning royal, as in a royal estate. Just a few decades ago, in the United States, only men who owned land could participate to vote, which goes to show you just how important the reality is. In this article we will be discussing the modern transaction process where you will need a Realtor to help you. Even if you think you can “do it yourself”, would you try and repair your own roof?
The Real Estate Closing
There are many types of realty transactions such as land deals, commercial property, single-family homes, industrial complexes, apartments, hotels, and mobile homes. No matter the type of transaction, it is beneficial to choose a real estate agent with experience. Each transaction type requires a different set of contracts, rules, regulations, people, and steps, but there’s always a bottom line; you’re buying something real, of real value. Investing in the stock market or cryptocurrency is ethereal, but real estate is as real as it gets.
Now, let’s say you don’t want to purchase real estate as an investment, and instead want to buy a home, or sell a home… what do you need to do? First, contact a Realtor. A Realtor is a professional in the realty business and will help your transaction go smoothly. They take a small fee of 3 to 6% of the total purchase price or sales price of the home because they took the risk and used their expertise to help you through the purchase or sale. Whenever you’re dealing with a realty transaction you should always, always use a Realtor. Some people try to cut out the Realtor, thinking they will be able to save money when all they’re doing is hurting themselves.
Basic 5 Step Process
The purchase and sale transaction of a piece of property, in this case, a home, will contain a total of five major steps which include:
- The Offer to Purchase
- Contingencies, Inspections, and Title
- Approval From a Lender (or not if you’re paying all cash)
- Final Closing
The offer to purchase is the first step in any transaction. It is the first move made by the buyer to give an offer to the seller. From there, negotiations begin to come to an agreement for the final terms and price that should make both parties content to proceed with the sale. Once the contract is signed and everything has been reviewed, escrow is opened. An escrow company is an intermediary between the buyer and seller, which ensures proper paperwork is completed, and transfer the money from one party to the next.
The third step of contingencies and inspections occurs shortly after the contract has been signed. These include checking appliances, roofs, floors, foundations, gas lines, electricity, and allthat is needed in order to keep a house running and comfortable. Once the inspector finishes his report, the buyer must have an approval letter from a lender. This fourth step can be disregarded if the buyer is paying all cash for the home. Once the contingencies are done and the money has been placed, the title is transferred to the new owner and the final closing date is recorded. At closing, the parties receive final documents and the title company will then record the sale to the county assessor. You have now sold, or purchased, a property.
In concluding this article, we discussed the topic of property transactions and what it takes in order to close a deal. Both parties must be satisfied with the process and a Realtor should be used in every part of the transaction. If you’d like to learn more, please stay tuned for upcoming blog posts.