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OVERVIEW: Typical real estate transactions involve the purchase and sale of real property. The real property can be either residential or commercial property that is either vacant or is occupied by buildings. If you are unfamiliar with real estate transactions, it is recommended that you seek the advice and help of a lawyer.
The first step in the real estate transaction for a buyer is to complete an investigation as to whether the property is suitable for the purposes of the buyer and whether the price is acceptable. For example, for the purposes of suitability, the buyer will want to make sure that the property is zoned accordingly for the intended use. Just the same, the buyer will also want to review recent sales in the surrounding area as market research to determine if the price to be paid is comparable to other recent sales.
When the buyer and seller finally agree on a price for the purchase and sale of real property, the next step is for the parties to enter into a written contract. There is no universal contract form that must be used but it is suggested that the FAR/BAR form be used. The FAR/BAR form is a widely used form recommended by the Florida Association of Realtors and the Florida Bar. If you are unsure on how to complete a contract for the purchase and sale of real property, it is strongly suggested that you seek the services of a lawyer to help you before you sign such a document. This is very important because there is little that any lawyer can do for you in trying to change a contract once you have already signed the contract. The fact that the deal may be unfair is not a valid basis to overturn or void a contract between two consenting parties.
After the signing of a contract, a title company is employed to investigate the title of the property and determine if there are any outstanding liens on the property. A title company will produce an owner's title policy insuring title for the property at the closing. Prior to the closing, the title company will verify the chain of title for the property to ensure that the same was being transferred free and clear of all liens. Covenants, restrictions, and encumbrances that have been dully recorded on the property are noted and excepted from the owner's title policy. Depending upon what the title search may reveal, an attorney may be necessary to assist in clearing a cloud upon the title. The transaction is finally ready to close when all title issues and liens have been addressed.
The final step in the purchase and sale of real estate takes place at the real estate closing. All the details concerning title, payment of liens, and financing are finalized at the real estate closing. Thereafter, the bill of sale, deed for the property and any mortgage/financing documents will be signed. Finally, you will need to review and sign the HUD Settlement Statement. The HUD Settlement Statement contains all charges, payments, costs and disbursements for the transaction, including payment of liens, taxes, and closing costs. A lawyer can assist you by explaining the real estate closing process and by reviewing all title and closing documents. Likewise, a lawyer can prepare any documents that may be required for the closing including a warranty deed, bill of sale, seller’s affidavit, or mortgage instruments.
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