A real estate transaction is the process by which the current owner of a property transfers the possession of it to a buyer. The buyer takes possession of it once both parties negotiate a fair purchase price, agree to the terms of the sale, and go through a closing process in which the property is retitled to the new owner. There is an exchange of equal value to compensate the seller for the property.
In theory, a real estate transaction sounds relatively simple. In practice, it can be more complicated. Often the buyer is not able to pay for the property out of pocket, so he or she has to take out a loan to fund the purchase. There can be other factors that further complicate the process.
Even a basic real estate transaction can be more involved than it seems at first. It may help to understand the fundamentals involved.
What Are the Necessary Documents?
The key document needed in a real estate transaction is the contract between the buyer and the seller that sets forth the terms of the sale. Prior to this point, the seller must release a disclosure describing all the known issues with the property. Other documents include appraisal of the property’s value for insurance purposes and an inspector’s report. At closing, both parties must sign documentation that makes retitling the property official. Oral agreements are not acceptable in a real estate transaction; they must all be in writing.
Who Is Involved in Closing a Real Estate Transaction?
The buyer and the seller both have documents to sign at closing to complete the transfer of the property. Often, both are present at the same meeting and sign their documents at the same time, though this is not a requirement. It is also not required that buyers and sellers hire real estate agents to represent them, although many choose to do so in the interest of having a professional assist with negotiations. Any real estate agents engaged by either the buyer or the seller will be present at closing as well. The other essential participant at a real estate closing is a representative of the title company.
If the buyer has taken out a mortgage to fund the purchase of the property, his or her lender will be present at closing, which will involve signing financial documents as well as those transferring the property. Some jurisdictions also require attorneys at closing. Even where it is not required, it may be beneficial if the transaction is particularly complex.
Contact a law office if you think you may need a r eal estate lawyer in Sacramento, CA, such as from Kassouni Law, for your real estate transaction. Attorneys can explain the laws applicable to your situation.