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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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Unfortunately, is can sometimes lead to further confusion! Basically, the interest rate associated with the lender’s prospective loan that is referenced on the TILA form is an all-inclusive number that attempts to express in interest rate form what the true cost of buying the house will be for the Buyer. [This means that the TILA rate will, in almost any imaginable situation, be higher than the interest rate referenced on the Note.]

5.)    The Closing. Although not technically required under the law, a real estate transaction is typically only finished when the Buyer and Seller (or the Seller’s representative) have met to tie up all of the lose ends at the Closing. Although by the time of the Closing, the Buyer and Seller have already been legally bound by the real estate contract for several weeks, it is at the Closing that the actual legal document evidencing ownership to the property, the Deed, is transferred to the Buyer, and it is at the Closing that the Buyer effectuates transmittal of the purchase price to the Seller. What follows is a list (not comprehensive, by any means) of the more important documents that a would-be Buyer or Seller of real estate should familiarize themselves with (and that both parties’ attorneys should explain in detail) prior to the Closing:

a. The Deed. The deed to the property being sold is the legal document that, when properly executed and delivered, passes title from the Seller of real estate to the Buyer of real estate. Generally, a deed must meet the following requirements in order to viably pass title:

i.)   Grantor and Grantee. As in the drafting of the real estate contract that precedes it, a deed must contain the name of the Grantor (i.e., the Seller) and the Grantee (i.e., the Buyer) in order for the granting (i.e., conveyance or sale) of real estate via the deed to be valid. However, the deed need only be signed by the Grantor. Although not legal requirements, the Grantor’s signature should always be notarized and the deed should always be dated for title insurance purposes.

ii.) Consideration. The sometimes arcane and rather obtuse requirement of consideration basically means that the transfer of a deed cannot be gratuitous. The Grantor (i.e., the Seller) must be given something in exchange for the deed. In most cases, of course, the Seller of real estate receives the purchase price, which sum is his/her true consideration for conveying the deed to the Buyer. However, the Buyer and Seller will also typically want to keep the financial details of their transaction private. Thus, a “nominal consideration can be stated on the deed, instead of the full purchase price. A sum as low as $1 will probably suffice.

iii.) Delivery. This is one of those fascinating and seemingly archaic aspects of the law in most U.S. states that can be traced back to early English law via the common law. .


See Also:

Common Law Vs.
Civil Law

The Statute of Frauds

Doctrine of Equitable

in this document:

Preliminary Matters


The Role
of the Attorney


Hiring a Real Estate


Real Estate Seller’s Agent

Real Estate Buyer’s Agent

Real Estate Broker


Negotiating the
Real Estate Contract

‘For Sale By Owner’

Deciding Key Terms


Pre-Closing Matters


Mortgage Issues


The Closing

The Deed

Affidavit of Title
ALTA Statement

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© Roger Galer, 2004

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