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The Real Estate Purchase Process

Purchasing real estate is a multi-step process that brings together several specialists in order to complete this complex task. The real estate purchasing process differs from other purchases in the amount of time it takes to complete and the amount of people and research it takes to get to a real estate closing.( Real Estate. Funk & Wagnalls New World Encyclopedia. January 2018) For many people, purchasing real estate will be a major investment in their lifetime.(Legal Due Diligence Issues in Real Estate Purchase Transactions. Real Estate Finance Journal. Spring 2007) Sincet this is such an important process, people should take the time to get a basic understanding of how it works.( Real Estate. Funk & Wagnalls New World Encyclopedia. January 2018) Once a basic understanding is obtained, people can move on with a basic understanding of the process.( Real Estate. Funk & Wagnalls New World Encyclopedia. January 2018)

The first step in the process is to choose a real estate agent who will represent the buyer/seller in the transaction.( Real Estate. Funk & Wagnalls New World Encyclopedia. January 2018) The real estate agent will be responsible for drawing up the contract to purchase property.( Real Estate. Funk & Wagnalls New World Encyclopedia. January 2018) Once the contract is accepted the purchaser will make a deposit as specified in the purchase agreement.(Legal Due Diligence Issues in Real Estate Purchase Transactions. Real Estate Finance Journal. Spring 2007)  Once acquired, a deed is given by the seller to the purchaser.(Legal Due Diligence Issues in Real Estate Purchase Transactions. Real Estate Finance Journal. Spring 2007) The deed is a legal document, and must be witnessed and signed by all parties to go on record.(Legal Due Diligence Issues in Real Estate Purchase Transactions. Real Estate Finance Journal. Spring 2007) The purchaser must hire a lawyer or title company to affirm clear title.(Legal Due Diligence Issues in Real Estate Purchase Transactions. Real Estate Finance Journal. Spring 2007) The title company guarantees clear title.( Real Estate. (Funk & Wagnalls New World Encyclopedia. January 2018)

Upon acceptance of the contract the purchaser and his/her agent will commence their due diligence' .' (Legal Due Diligence Issues in Real Estate Purchase Transactions. Real Estate Finance Journal. Spring 2007) The contract must provide the purchaser with a set time period to inspect the property and raise any objections that should arise.(Legal Due Diligence Issues in Real Estate Purchase Transactions. Real Estate Finance Journal. Spring 2007) During this period the property will undergo all necessary inspections to ensure the property is free from any building flaws and free from any kind of damage caused by insects or rodents.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991) This would also be the time when a survey of the property would take place.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991)

Once the contract is accepted, the purchaser will begin to acquire a loan unless it is a cash sale.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991) The purchaser will hire a banking institution or a mortgage company to assist with the purchase.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991) The bank/mortgage company will assign a loan officer to the account.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991) Once the purchaser is certified to make the purchase, an appraiser is sent to give his opinion of the price of the property based on surrounding comparable sales.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991) In real estate markets, properties are bought and sold on an infrequent basis.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991) Current market value of real estate must be gathered from information regarding comparable sales in the area.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991)The appraiser will then submit his report affirming the purchase price and the loan is funded.(Price Formulation and The Appraisal Function in Real Estate Markets. Journal of Real Estate Finance and Economics. 127-146. 1991)T

After funding is approved, the real estate agent will set a closing date at a title company with the the buyer and seller.(Legal Due Diligence Issues In Real Estate Purchase Transactions. Real Estate Journal. Spring 2007) The title company which employs attorneys on their staff will review all documents relating to the property’s title.(Legal Due Diligence Issues In Real Estate Purchase Transactions. Real Estate Journal. Spring 2007) This will make sure that no one else can make a claim to the land and make sure there are no existing liens or judgments against it.(Legal Due Diligence Issues In Real Estate Purchase Transactions. Real Estate Journal. Spring 2007) Counsel must also study any existing easements or agreements that will bind the purchaser after closing.(Legal Due Diligence Issues In Real Estate Purchase Transactions. Real Estate Journal. Spring 2007) After this is complete, the title company will issue title insurance guaranteeing the property is safe for transfer.(Legal Due Diligence Issues In Real Estate Purchase Transactions. Real Estate Journal. Spring 2007) Both parties sign the required paperwork and the purchase process is complete.(Legal Due Diligence Issues In Real Estate Purchase Transactions. Real Estate Journal. Spring 2007)