9 Steps of a Real Estate Transaction

The exact steps of a real estate transaction may vary depending on the location and specific circumstances, but generally, the process involves the following steps:

1. Pre-approval: Before starting the search for a property, it’s important to get pre-approved for a mortgage loan. This involves submitting an application and providing financial information to a lender to determine how much they’re willing to lend.
2. Property search: Once pre-approved, the buyer can start looking for a property that meets their needs and budget.
3. Offer: When a suitable property is found, the buyer can make an offer, usually through a real estate agent. The offer should include the price the buyer is willing to pay, contingencies (such as inspections or financing), and a proposed closing date.
4. Negotiation: The seller may accept the offer, reject it, or make a counteroffer. Negotiations may continue until both parties agree to the terms of the sale.
5. Contract: Once the buyer and seller agree on the terms of the sale, a contract is drawn up and signed by both parties. The buyer typically makes a deposit, also known as “earnest money,” to show their commitment to the purchase.
6. Home inspection: The buyer typically hires a professional home inspector to evaluate the condition of the property and identify any potential problems.
7. Appraisal: The lender will require an appraisal to ensure the property is worth the purchase price.
8. Final loan approval: The buyer’s lender will need to review the inspection and appraisal reports, and other financial information to approve the loan.
9. Closing: On the closing day, both parties sign the final paperwork and the buyer pays the remaining funds, including closing costs and any down payment, to the seller. The title is transferred from the seller to the buyer, and the buyer becomes the legal owner of the property.