Today at
Coldwell Banker I learned the functions of the real estate transactions, from
the initial offer to the closing documentations and the agents role in the
process for the state of Massachusetts. I don’t think I’ve absorbed so much
information in one day since revising for my A-levels last year!
The process takes
place in five parts.
1.
Offer - (this is a written offer to purchase)
2.
Home inspection - (done 7 to 10 days after the
signing of the written offer)
3.
Purchase and sales agreement – (created after
the offer is accepted and agreed by all parties)
4.
Mortgage commitment – (a letter by a mortgage
company or a bank which provides the written letter a buyers had obtain citing
a mortgage acceptance to purchase a property)
5.
Closing – (complete ownership transferred from
seller to buyer)
1. Offers
I have bullet pointed below the sequence of how an offer is
made:
·
Preparing an offer – agents need to prepare an
offer to present to a listing agent.
·
Presenting the offer
·
Required forms and contingencies
·
Counter offers – negotiations
·
Agreement reached.
In the state of Massachusetts, the offer must be summited to
the purchase agreement. I have scanned in the exact copy of what Coldwell
Banker looks like:
This includes all contracts agreed by all parties, such as:
·
Purchase price.
·
Date of agreement and of the closing.
·
Identity of the parties and description of
property.
·
Amount of earnest money to be paid (Deposit).
·
Financial information (Terms and commitment
date).
·
The pre-approval is not a commitment. A mortgage commitment date is important in protecting the buyer’s deposit.
·
Buyers choice to conduct any inspections 7 to 10
days after the offer, they must list what type of inspection.
·
Special conditions or requests can be made such
as items included, items excluded, what the seller will pay like closing costs
and home warranty.
·
The expiration date is usually 24 hours after
the offer has been made.
There are certain forms that accompany the offer:
·
All contingencies inspections and deadlines.
·
A copy of
a signed sellers property disclosure, initialed and signed by the buyer.
·
A copy of the buyers pre-approval, which
confirms they have read and acknowledged the contract.
·
A copy of the seller’s signed lead disclosure
initialed and signed by the buyer.
·
The buyer’s agent also needs to disclose their
relationship with the buyer in writing. For example, are they working with or
are they neutral. This is stated through a copy of the mandatory relationship
disclosure form.
I have scanned in a copy of what a contingency form from a Coldwell banker sale would look like:
Offer can be multiple which means the sellers can choose one
of three options:
1.
Can accept everything as written.
2.
Can reject everything as written.
3.
Can accept some of the terms and reject or make
counter offers.
When managing the sale all the contingency dates should be
met from the inspectors, financial and insurance advisors, utility readers and
smoke carbon certificates. Open communication should be maintained with the
client, co-operating agent, mortgage agent, inspectors and attorney.
2. Home Inspection
After 7 to
10 days from the signing of the offer to purchase, several inspections should
be done. The goal is to uncover any additional substantial deficient conditions
that weren’t previously known to the buyer. These include:
·
Pest infestation
·
Septic system
·
Flood plains
·
Wetlands
·
Hazardous substances
Radon Gas
·
Physical/Mechanical/Structural
·
Well water
·
Lead
The buyer can either pull out or give the seller a chance to
repair. Any agreement reached after the inspection should be in writing, if
defects are found the sale price can be reduced. The home inspection needs to
take place in the home contingency period so that the deposit is not at risk.
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