STANDARD CONCEPTS OF A REAL ESTATE AGREEMENT

• LETTER OF INTENT – A non-binding agreement between both parties prior to the signing of the formal purchase contract.
• SALES PRICE – The goal of most sellers is to obtain the highest price possible and most purchasers want to buy at the lowest price.
• THE OFFER – This is the first step in negotiating the real estate contract. This must be in writing and should specify all terms and conditions of purchase.
• DUE DILIGENCE – This is the critical step that entails an investigation including environmental, technical, supply/demand analysis, examination of title, physical property inspections, and other legal and engineering tasks that must be completed prior to closing on the asset.
• THE CONTRACT – After the offer is accepted, the parties negotiate the final purchase and sale agreement.
• ESCROW – Third party escrow opens when the purchase and sale agreement is signed. The escrow process is insurance to all parties of a real estate transaction that no funds will change hands until all instructions given to the escrow officer, with regard to the real estate transaction, have been met.
• CLOSING – Closing occurs when all funds are exchanged and when the deed to the property transfers to the buyer upon satisfaction of all conditions contained in the purchase.
• DEED – The deed recordation process transfers title from the former owner to the new owner or owners.