Real Estate Transaction Overview—a bird’s eye view of the real estate transaction from the very beginning when we first meet with a prospect all the way through to the end when we collect a check at the closing table.

I want you to start thinking about the deal flow of a real estate transaction in two phases. The first phase is the sales process—this includes prospecting, meeting your client, and working through to negotiating and ratifying a contract. The second phase is the contract-to-close process, which begins at contract ratification and ends at closing.

This overview of the transaction will be broken down into the seller’s side on the left and the buyer’s side on the right. Notice that the seller side has comparatively fewer steps, while the buyer’s side has more.

Seller’s Side Overview:

Let’s start with the seller’s side. There really aren’t a lot of steps involved.

  1. Listing Appointment: You’ll meet with the seller, present a Comparative Market Analysis (CMA), and establish the listing price.
  2. Listing Agreement: At this meeting, have the seller sign the listing agreement and any required disclosures. This makes them an official client.
  3. MLS & Marketing: Once you have a signed listing, you’ll put the property in the MLS (Multiple Listing Service) and set up advertising. Most advertising is fed through the MLS, and you can also make cold calls and hold open houses.
  4. Professional Photos & Lockbox: Order professional photos and install a lockbox at the property.
  5. Minimal Visits: Ideally, you only need to visit the property a couple of times. You’ve done the upfront work, and now someone else will likely sell the listing for you.

This is why I love working with sellers—the process is fairly straightforward and hands-off once you’ve done the initial setup.

Buyer’s Side Overview:

Now, moving over to the buyer’s side, you’ll see that there are more moving parts. Each of these steps is crucial, and skipping steps can lead to issues.

  1. Initial Contact & Pre-Approval: First, you’ll make contact with a buyer and identify who is looking to buy within the next six months. The key things to get upfront are the buyer agreement and pre-approval. Never take a buyer out without a signed buyer agreement and a pre-approval letter.
  2. Comprehensive Buyer Interview: Conduct a thorough interview with the buyer to understand their wants, needs, and budget.
  3. Lender & Pre-Approval Process: Have the buyer speak with a lender. They’ll either qualify for a loan, or if they don’t, you’ll need to create a plan to help them improve their credit or financial standing.
  4. Search Criteria: Once they’re pre-approved, you’ll send them a list of homes within their price range. Narrow the options down to the top 5 properties and then focus on showing the top 3.
  5. Making an Offer: After viewing homes, if they find one they like, it’s time to make an offer. You’ll gather the terms (price, closing date, deposit, etc.), include the seller’s disclosures, and submit the offer with the buyer’s pre-approval letter and earnest money check.

This is where the transaction starts getting exciting, as you enter the negotiation phase.

Negotiation Phase:

In this phase, the buyer’s agent submits the offer, and the seller responds. They’ll either accept, counteroffer, or reject it outright. Negotiations can go back and forth until a meeting of the minds is reached, and the contract is ratified.

Contract-to-Close Phase:

Once the contract is ratified, the deal moves quickly with many moving parts. Here’s a breakdown of the key steps:

  1. Title Company & Deposit: Submit the contract and deposit to the title company.
  2. Lender & Appraisal: The lender orders an appraisal and moves the loan through underwriting. They’ll verify the buyer’s financials, and eventually issue a clear to close.
  3. Home Inspection: On the buyer’s side, you’ll order a home inspection. Review the report, and if there are issues, negotiate repairs or credits with the listing agent.
  4. Title Search: The title company will conduct a title search to ensure there are no issues with the property’s ownership.
  5. Final Walkthrough: Just before closing, the buyer’s agent will take the buyer for a final walkthrough to ensure the property’s condition is as expected.
  6. Closing Day: On closing day, the buyer and seller meet, exchange keys, sign documents, and the deal is finalized.

Throughout this phase, it’s critical that everything is completed by the contract’s closing date. If there are delays (e.g., the lender taking longer), you may need to extend the closing date.

Finally, on the day of closing, both parties come together. The seller hands over keys, garage openers, and any warranties. The buyer gets a new home, the seller gets paid, and everyone is happy.