1. The Buyer usually contacts a Real Estate Broker to help locate a property he/she would like to purchase.
Real
Estate Broker- Any duly licensed person, firm, or corporation who for
a fee or commission lists for sale, sells, or exchanges real property.
2. The Broker helps the buyer find a home.**
3. The Broker usually conducts a Comparative Market Analysis to help determine the value of the home.
Comparative
market analysis- An estimate of the value of a property based on an
analysis of sales of properties with similar characteristics.
4. The Buyer usually makes an offer by submitting a real estate binder.
Real
Estate Binder- An agreement intended to evidence a modest payment
toward the purchase of real estate as evidence of good faith on the
part of the purchaser and acceptance by the seller. (A real estate
document generally used in residential transactions).
5. Seller accepts or rejects the offer.
6. Assuming the offer is accepted, the buyer then hires an engineer/home inspector.***
7.
Once both parties have agreed to move forward, the seller's attorney
drafts and sends a proposed contract to Buyer's attorney.
8. Contract terms are negotiated by the attorneys.
9. Buyer meets with his attorney for the "contract signing."
10.
Buyer's attorney collects the down payment check, which is made out to
the seller's attorney "as attorney," to be held in escrow, by the
seller's attorney, until the closing.
11. The signed contract and Down payment are forwarded to the Seller's attorney.
12.
Buyer receives a copy of the fully executed contract, signed by all
parties. This is then used to obtain a loan (Commitment Letter) if
necessary.
Commitment Letter- A promise by a lender to make a loan with specific terms for a specified period.
13. Buyer's attorney orders a title examination & survey.
14. Once all issues are resolved and the lender gives a clearance to close, a real estate closing is set.
Real
estate closing- The transfer of the real estate title from seller to
buyer according to the sales contract. All parties, as well as a title
closer and bank attorney, arrive to consummate the transaction. The
buyer receives the title and keys to the real estate and the seller
receives the balance of the purchase price.
*The above is
merely an overview of a real estate transaction. Additional and/or
different steps may be required during a particular transaction. This is not legal advice. All rights reserved.**The Broker will likely request/require you to obtain a mortgage pre-approval before they begin showing you homes.
***The
inspection can be done after step 12 if the parties agree. This is
usually accomplished by placing an "inspection contingency" clause in to the
contract.
Robbie L. Vaughn,
Long Island Real Estate and Bankruptcy Lawyer
70 West Main St.
East Islip, NY 11730
631-277-4907 (Phone)
631-277-4908 (Fax)