A. Pre-Contract

When a seller (the “Seller”) sells real estate to a buyer (the “Buyer”), several important steps are involved. Initially, the seller lists the property for sale, often with the assistance of a real estate broker to find potential buyers. Once a willing buyer is found, both the seller and the buyer will typically hire separate attorneys to represent their interests in the transaction.

It is recommended that the buyer conduct termite and/or home/engineer’s inspections before signing the contract to assess the property’s condition. If the buyer is satisfied with the property’s state, the parties move forward to the contract stage.

B. Contract

Upon the buyer’s attorney’s notification of readiness, the seller’s attorney will prepare the Contract of Sale, which is then sent to the buyer’s attorney. This crucial document outlines essential details such as the names of the buyer and seller, the property for sale, the purchase price, and various terms and conditions of the sale. It also covers the responsibilities of both parties, timelines for acting in good faith, and provisions regarding defaults.

Both the buyer’s and seller’s attorneys work to protect their clients’ rights and clarify expectations. Given its significance as the primary reference in the transaction and for any legal proceedings, careful drafting and negotiation by both attorneys are crucial.

Once both parties agree on the terms, the buyer signs the contract and provides a down payment check, which is sent to the seller’s attorney to be held in escrow until the closing. The contract becomes binding once the seller’s attorney receives the down payment and both parties have signed it. At this point, both parties are obligated to fulfill the terms of the contract. It is important to note that any promises made in the contract become void after the transfer of title to the buyer unless explicitly preserved.

Upon securing financing and preparing for closing, the buyer’s attorney will coordinate with the necessary parties to schedule the closing.

C. Closing

At the closing, the sale is finalized by the buyer, seller, their respective attorneys, the title closer, the bank attorney (if applicable), and any real estate agent or broker involved. Title to the property is transferred from the seller to the buyer. The buyer pays the remaining purchase price, settles any outstanding taxes, makes adjustments for fuel, water, and taxes, and ensures the mortgage and deed are recorded with the County Clerk. After receiving the keys, the buyer becomes the new owner of the property.