In a major metropolitan area like San Francisco, real estate transactions take place about every day. Residential and commercial sales, leasing, lending, homeowner association issues – these are all part of real estate transactions, just to name a few areas of concern. So, what are some of the basics about real estate transactions that our readers should know?
Understanding the basics
When it comes to the exchange of ownership of property – a real estate sale – there is a basic framework that most deals follow: identifying the property that the buyer desires to buy; offering a purchase price, which must of course be accepted by the seller; and then, closing the transaction.
Whether the buyer is looking for residential, commercial or even industrial property, the specifics of what the buyer has in mind will always be unique. Oftentimes, this first step is the one that takes the longest. Buyers may not find everything they want out of any given property, but when they do it is time to make an offer.
Now, in most cases, a seller will already have a proposed selling price listed with the property. But, as long as the two sides agree on an appropriate price, the transaction can move forward.
Closing the transaction is the last step. Depending on the details of the transaction, closing will only occur after a due diligence period when the buyer in particular will have an opportunity to inspect title, environmental, structural and operational details of the property.
Closing is when the ownership of the property actually changes hands as the purchase price is paid in full. There are always quite a few documents for the parties to sign to close the deal, and if financing is involved there will be even more. Buyers and sellers alike should be ready for a detailed closing process.