Understanding the concepts of real estate sales transaction process is an important step essential to successful real estate investing. This is the top most secret in real estate investing used by many professional real estate investors and experts to maximize profit and to gain control of the real estate market by taking advantage of every opportunities and possibilities the market presents to them.
Before I let you into the secrets, let me quickly walk you through a simple real estate investing sales transaction process which begins with you having a home approval letter which is normally sent by your agent to the seller’s agent or the property owner together with your purchase offer.
If you approach a brokerage firm or use an agent for this service, it is the responsibility of that real estate brokerage firm or agent to search every inventory on the real estate market which fits into your budget and criteria. The firm may also assist in negotiating the terms of the purchase on your behalf.
After the search for a real property asset that fits into your budget and also meet with your required specification as to the number of bathrooms, bedrooms, kitchens, living rooms, garage, swimming pool dining room etc is successful then the firm will prepare a purchase agreement.
As an investor you must ensure that the purchase agreement includes your name, the financing terms of the real property asset, the purchase price and other information about the offer. It must clarify who pays for inspection and report and how the sales transaction will unfold with specific dates to accomplish specific tasks of the purchase.
The home approval letter, purchase offer that must have been signed and initialled by you are sent to a listing agent with a cover note to show how serious and committed you are in purchasing the real property asset. Many firms work with reputable listing agents and they usually send a good faith deposit of 10% of the purchase price to the listing agent to further demostrate their client’s desire to purchase the property asset.
It is worthy of note that if there exist any circumstances that prevent you from going ahead with the purchase of the property asset and all earmarked period to accomplish all the tasks in the sales transaction process is over, simply put the period or time frame prescribed in the purchase offer and the escrow instruction has elapsed, then the seller is entitled to between 2% and 4% of your initial 10% good faith deposit of the purchase price.
If you must avoid this pit-fall, then you must study the escrow instructions very well to help you answer questions you might have on both parties obligations to know who is responsible for what and when. The escrow instructions clearly states who is responsible for home warranty and title insurance, also how and when inspections and other sales transaction events must take place and be completed.
In addition, If there is a lien against the property asset, you must ensure that the lien is removed to enable easy and smooth conveyance of ownership simply put for easy transfer of ownership in your name. The title insurance ensures you are purchasing from someone who has the right to sell the property asset to you while home warranty ensures repairs or replacement in some cases of faulty systems in the property asset as agreed in the home warranty contract.
At some point in the sales transaction process, escrow may request your lender to forward the loan documents for processing if they don’t already have it. The loan documents are basically all information on the terms of the loan which also must be signed and initialled by you before you can access the loan facility.
However, If all is right and moving as planned, then you may have your purchase offer accepted which will signify opening of escrow for the real estate sales transaction process. As rightly mentioned earlier your escrow instructions have stipulated period for both parties to make up their minds on if to go on with the sales or withdraw from the sales.
This gives enough enough room for all types of inspections to be carried out on the property asset to ascertain the condition of all the systems such as heating, electrical, air conditioner and plumbing systems. It is also recommended to check the roof, garage, play grounds, swimming pool and the foundation during this period to make good investment decisions.
If you are busy person and have no time to carry out inspections on the property asset to determine the physical state or condition of the asset to know if it is still as it was the first time you saw it before making the purchase offer. No qualms you still can make the best use of at least between four to five days after escrow is closed.
I want to believe that after this pithy on understanding real estate investing sales transactions you should by now exude confidence in dealing with issues relating to sales or purchase of real property assets because you now know the process, what to do, expect and what to guide your investment against.
Moreover, the search and hunt for great property asset deals that meet or exceed your expectations , fit into your investing plans, budget and specified criteria remain an arduous task, it is difficult, demanding and somewhat challenging.
For real estate investors to succeed at constantly getting great property asset deals, they must be smart enough, diligence, exhibit steadfastness and above all they must double their effort in digging deeper into every inventory available on the real estate market.
Understand and conceptualize some special real estate investing sales resources that should strike your mind whenever you are considering or thinking of investing in any real property assets or participating in real estate sales transaction process.
If you dig deep into these resources whenever and wherever the opportunity presents itself and you constantly apply some of the secrets smart investors use in getting great deals which I will explain to you in subsequent posts. There are chances that you will consistently get the best available property assets at great prices or discounted prices lower than the market price.
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