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The Typical Residential

Real Estate Sales Transaction:

An Overview for Buyers and Sellers  

NOTE:  This article is intended to be a brief summary of law only, parts of which may or MAY NOT be applicable to your situation and/or your local jurisdiction(s).  Any information you glean from this article DOES NOT constitute legal advice and should be supplemented with the advice of an attorney licensed to practice law in your locality.

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vi.)           Prorations. What happens to real estate taxes and utilities like water and heating if the Seller moves out, and Buyer takes possession, between the time each of these bills comes due (which is almost always the case)? Items like these should be prorated at the time of contract formation and, if possible, settled at the Closing.

vii.)         Fixtures, Personal Property & Bill of Sale. Sure, we remembered to put the house down on the contract, but how about all of those things inside the house? Which ones are moving out with the Seller? Which ones will stay with the house and thus represent a component, however small, of the purchase price? If such matters are not put to writing, they could a matter of disagreement later at a much more inconvenient date!

viii.)       Post-Closing Possession Agreement. In many cases, the Seller will, him/herself, be purchasing a new property and might not be able to move out of the old one by Closing day. In such a case, assuming the Buyer agrees to such an extended stay, a final, deadline date by which the Seller will move out should be included in the real estate contract. A separate agreement outlining such items as the compensation (i.e., rent) to be paid by the Seller to the Buyer for the Seller’s post-Closing period of possession should be attached to the main contract.

ix.)           Condominium/Association Letters & Waivers. If the property is a condominium, a house belonging to an association, or is tied together in some other type of group living arrangement, certain additional items need to be clarified/arranged, and it’s almost always best to get these items out of the way prior to signing the sales contract! For example, any housing association must be contacted by the Buyer (typically, the Buyer’s attorney) to verify the amount of assessments levied on the property, to confirm the amount, if any, of any current or planned special assessments (these can be a nasty surprise!), and to request a waiver of any right of first refusal held by the association.

NOTE: Again, the foregoing list is not comprehensive. Rather, it simply outlines some of the most important items involved in a typical real estate transaction and/or some of those items that most frequently surprise and/or cause grief for Buyers and Sellers of residential real estate. Your attorney should explain these and other important documents to you in further detail.

4.)    Pre-Closing Matters. Once the contract is signed, and prior to the date set in the contract for the Closing, a number of issues need to be addressed and/or resolved:

a.   Inspections. Prior to Closing, the Buyer will want to confirm that the real estate is really in the same condition in which he/she believes, and the Seller represents, it to be. This will necessitate hiring a licensed inspector to visit the property and inspect the property’s exterior and interior, heating and air-conditioning, electrical wiring, foundation, the condition of the land surrounding the property (where applicable), and so on. As referenced in Deciding Key Terms above, the Buyer has hopefully already made sure that the contract contained a good inspections clause stating that he/she has the right to cancel the contract if the inspector. . .

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See Also:

Common Law Vs.
Civil Law

The Statute of Frauds

Doctrine of Equitable
Conversion

Jump
Back/Ahead
in this document:

Preliminary Matters

v

The Role
of the Attorney

v

Hiring a Real Estate

Agent/Broker

Real Estate Seller’s Agent

Real Estate Buyer’s Agent

Real Estate Broker

v

Negotiating the
Real Estate Contract

‘For Sale By Owner’

Deciding Key Terms

v

Pre-Closing Matters

Inspections

Mortgage Issues

v

The Closing

The Deed

Affidavit of Title
ALTA Statement

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© Roger Galer, 2004

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