THE PROCESS OF A TRANSACTION – WRITTEN OUT
Property is listed on the market. What is a property worth? What a seller is willing to sell for and what a buyer is willing to pay. Offers come in and the listing agent must present the offers immediately to the owner unless otherwise instructed by the seller of the property (i.e. seller wishes to view all offers on the Monday after the property was listed).
The seller has either accepted an offer or has countered the buyer with different terms. Terms that can be negotiated are price, financing, down payment, earnest money, closing date, inspection period, what inspections are done, who pays for what inspections, seller rent back amongst many other things.
Seller and buyer have agreed upon the terms of the purchase agreement. At this point the buyer will open escrow at the agreed upon title company. Earnest money is deposited either in the broker’s client trust account or the escrow company. Escrow will order the preliminary title report for review by all parties.
Timeline for inspections and close of escrow begins the day after mutual acceptance of the sales agreement. Earnest money deposited with escrow per agreed upon terms of the sales agreement.
THE INSPECTION PERIOD
All preferred inspections scheduled. Inspections performed and inspection reports reviewed by buyer. Final decision on requested repairs (if any). Repair addendum submitted to seller (if required).
NEGOTIATION OF REPAIRS AND/OR CREDITS
Depending upon sellers reply to repair addendum, negotiation of remedies and/or credit to be applied in lieu of actual repairs.
APPRAISAL (IF NEEDED)
Buyers lender will require that the property appraise for the full purchase price listed in the sales agreement. Appraisal will be scheduled with the selling or listing agent. Appraisal performed and report submitted to lender. If appraisal is lower than the sales price, negotiations with the seller for remedy begins. If lender required repairs are noted, negotiations of those repairs are completed with seller.
Upon receipt of all requested documentation from the buyer and/or other sources needed including appraisal report and acceptable preliminary title report, entire loan package is submitted to underwriting for final lender approval. Upon final loan approval lender issues the CD (Closing Disclosure) for signature by the buyer, which begins a 3-day right of rescission.
LOAN DOCUMENTS ARRIVE
Upon arrival of loan documents at escrow, the escrow officer will produce the estimated closing statement for review by the selling agent prior to releasing to the buyer. Escrow will contact the buyer to schedule the actual signing of the loan documents. This usually takes place at the title company but can be arranged through a mobile notary.
Buyer meets with the escrow officer or mobile notary to sign the loan documentation. A government issued photo identification must be brought to the signing. Either a wire transfer of funds or a cashier’s check must be completed in this step. Many times, the selling agent will accompany the buyer at the signing.
FUNDING, RECORDATION AND CLOSING
After all documentation, has been signed, it is sent to the lender for final review. A wire with the loan proceeds is sent to the title company and permission is granted to release the deed for recordation at the county clerk’s office. The county then releases recording numbers to the title company which makes the transfer of ownership complete and concludes the transaction.
TIME TO CELEBRATE!