FAQ Real Estate Transactions
What Is a Real Estate Transaction?
A real estate transaction is the legal process of transferring property ownership from one party to another. It typically involves a purchase agreement, title search, inspections, financing, and a closing where the deed is transferred. The process can vary by state but generally follows a structured sequence to protect all parties.
Do I Need a Real Estate Attorney?
While not required in every state, hiring a real estate attorney ensures your rights are protected. An attorney can review contracts, explain terms, resolve title issues, and oversee the closing. In some states, attorney involvement is mandatory for real estate closings.
What Is Earnest Money?
Earnest money is a deposit made by the buyer to show good faith when making an offer. It’s usually held in escrow and applied toward the purchase price at closing. If the buyer backs out without a valid reason under the contract, they may forfeit the deposit.
What Happens During a Real Estate Closing?
Closing is the final step in a real estate transaction. It involves signing legal documents, transferring funds, and recording the deed with the county. Once complete, the buyer officially becomes the property owner.
What Is a Title Search and Why Is It Important?
A title search reviews public records to confirm the seller has legal ownership and that there are no liens, claims, or disputes over the property. It ensures the buyer receives clear ownership at closing.
What Are Closing Costs?
Closing costs are fees paid at the end of a real estate transaction, separate from the purchase price. They may include loan origination fees, title insurance, attorney fees, taxes, and recording charges. These typically range from 2% to 5% of the purchase price.
Can I Back Out of a Real Estate Contract?
Buyers and sellers can back out of a contract under certain conditions outlined in the agreement, such as financing, inspection, or appraisal contingencies. Backing out without a valid reason may result in financial penalties.
What Is the Difference Between a Realtor and a Real Estate Attorney?
A realtor assists with marketing, negotiations, and the overall sales process. A real estate attorney focuses on the legal aspects—reviewing contracts, resolving disputes, and ensuring a valid transfer of ownership. Both can work together to protect your interests.
How Long Does a Real Estate Transaction Take?
Most transactions take 30–60 days from contract to closing, depending on financing, inspections, and title work. Cash purchases can often close faster, sometimes within two weeks.
What Is Title Insurance?
Title insurance protects against financial loss from defects in the title, such as undiscovered liens or ownership disputes. Lender’s title insurance protects the mortgage lender, while owner’s title insurance protects the buyer’s ownership rights.
This article is for general informational purposes only and is not legal advice. Contact us today to discuss your specific situation.