THE REAL ESTATE TRANSACTION SEQUENCE- AN OVERVIEW

 

 

1. Showing takes place and broker and buyers determine interest.

 

2.  Offer Written - Cooperative agent writes an offer on the property including:

 

a.  Offer to Purchase Form

b.  Contingency Addendum

c.  Lead Paint form

d.  Agency disclosure form

e.  Initial deposit check (to the Listing Firm)

f.  Pre-Approval letter

 

3.  Appointment to Present offer - Cooperative agent notifies listing broker of offer and requests an appointment to present the offer to the Seller.

  

4.  Offer Presentation - Cooperative agent and Listing agent present the offer to the Seller together. Cooperative agent should bring adequate copies so that all parties present will have one. Seller and/or Listing broker ask questions of the Cooperative Agent.

 

5. Seller Response - Seller responds to the offer through the Listing broker – Rejects, Accepts, or makes a counter-offer.

 

6.  Buyer Response - Buyer accepts counter offer or writes new offer as required.

 

7.  Under Agreement - Process continues until mutual terms are agreed upon and the offer is fully executed (signed) by each party and each party has received a copy of the agreement. Real estate contracts must be in writing to be valid.  Do not tell Buyer or Seller that the property is under agreement unless it is fully signed and each party has a copy of the signed agreement.

 

8.  Upon acceptance of the offer to purchase:

a. The listing broker deposits the initial deposit into their escrow account.

b. The Buyer chooses a Home inspector and schedules the inspection through the brokers.

c. Listing broker immediately prepares a draft purchase and sale agreement (four copies) and sends four copies to Buyer, Seller, and attorneys if applicable.

 

 

 9.  Home Inspection:

 

 a.  Cost - $250. - $500. Paid by the Buyer.

       b.  Broker must give three names of home inspectors.

 c.  Inspection last 2 – 4 hours

 d.  Inspection covers roof, exterior, foundation, windows, heating system, plumbing, and electrical system.

 e. Inspector provides written report of findings

 f. Buyer may withdraw if major problems are revealed.

 

10. Purchase and Sale Agreement – A more detailed agreement that provides for many other possible eventualities that may occur. Usually Buyers' and Sellers' attorneys negotiate final language for the agreement.

The attorneys should NOT be re-negotiating the major terms of the sale.

 

11. Second Deposit - A second deposit, normally totaling 5%-10% of the purchase price including the first deposit, is made by the Buyer upon the signing of the purchase and sale agreement. This is normally done by certified or bank check.

 

12. Financing Application – Buyer applies for a mortgage, if applicable.

 

 

13. Smoke Certificate - Listing broker or Seller makes an appointment with the local fire department for a smoke detector inspection. Fire department inspects the premises and issues certificate of compliance, referred to as the smoke certificate.  Each local fire department has

its own schedule of available appointment times. This certificate must be presented at closing to close.  There is a fee ranging from $20-40 (depending on the department) that is required from the seller to obtain the smoke certificate.

 

 

14. Appraisal - Lender engages an appraiser to evaluate the property. The appraiser calls the listing broker for an appointment to view the home. He appraises the property and submits it to the lender. The cost of the appraisal is normally included in the Buyers’ closing costs charged

by the lender. If the property does not appraise at or above the purchase price the Buyer may withdraw, re-negotiate, or agree to invest a higher down payment.

 

15. Closing Attorney/Documents – The lender hires a closing attorney who orders a title search by a title examiner at the registry of deeds.The attorney also prepares the closing documents required by the

lender including the standard HUD (Dept of Housing and Urban Development) statement of settlement form. The HUD form shows all charges and credits to both Seller and Buyer and monies to be paid or received by each.

 

 

 

16. Final Water/Utilities - Listing broker obtains the final water and utility (if applicable) bills from the town. The Seller notifies all utilities (Gas, Electric etc.) of the sale and to close their account

as of the closing date. The Buyer MUST notify the utilities and set up new accounts for each in order to maintain service.

 

17. Final walk through – Just prior to closing (the day before or day of) the Buyer and cooperating broker walk through the premises to ensure that the Seller has moved completely out and that they are in the same condition as when the Buyer viewed the premises.

 

18. Closing – The closing is the actual sale of the premises. The Seller signs a new deed granting the property to the Buyers and the Buyers pay the purchase price to the Seller. A closing typically takes 1 – 2 hours and may be held at any mutually acceptable location.

Normally it occurs at one of the following places:

 

1. the closing attorneys office,

2. the registry of deeds,

3. the offices of the Buyers or Sellers attorney,

4. one of the brokers offices.

 

After the closing occurs the deed is immediately filed

at the Middlesex  registry deeds. The Seller receives the funds when the deed is filed and on record.

 

Keys are turned over to the buyer and the home is "offically the buyers."