hello everybody this is Tim Brooks with
the Brooks group at Keller Williams
Realty today I'm very excited to present
to you real estate transaction overview
a bird's eye view of the real estate
transaction from the very beginning when
we're first meeting with a prospect all
the way through the end and we're
collecting a check at the closing table
now I want you to start thinking about
the deal flow of a real estate
transaction in two phases the first
phase is going to be the sales process
so that's going to be meeting your
client prospecting and going all the way
through negotiating and ratifying a
contract the second phase is going to be
the contract to close phase and that's
going to be from contract ratification
to closing now this is an overall view
of the transaction deal flow with the
sellers portion of the transaction being
on the left hand side and the buyers
side of the transaction is on the right
hand side notice the seller has a
comparatively fewer steps in the
transaction process where the buyer
actually has a lot more steps in that
transaction so let's start on the seller
side and as you can see there really
just isn't a whole lot to it so we're
going to start out with a seller we're
going to have a listing appointment go
on that listing appointment and we're
going to go over the market analysis
with them we're going to go over the
listing paperwork itself that makes them
a client we're also at that time there
we're going to have them sign all of the
disclosures that were ultimately going
to give to the buyer which will then
come back to the seller in the form of
an offer and then a ratified contract so
present the CMA establish a listing
price which is part of the listing
agreement have the listing agreement
signed preferably at that initial
meeting that you go to with them and
then from there you have a signed
listing you're going to come back to the
office that's going to go in the MLS
we're going to put in all of the
advertising we're going to do which most
of it gets fed in through the MLS and
lists hub and some of the other means
that we advertise through we're also
going to be in boomtown making our cold
calls everything else hold open houses
and really once that marketing goes out
there
and our prospecting calls with our
buyers that's about it on the the seller
side don't forget we're going to have at
that point we're going to order
professional photographs we're going to
make sure that the lockbox gets put on
that property but one of my goals is
really to go out to that property as few
times as possible so again go to the
property meet with the seller establish
the price get the listing agreement
signed get your disclosure sign put it
in the MLS have your professional photos
done and then that's it that's why
sellers are so awesome to work with
because it's really it's fire-and-forget
guess who's actually going to go sell
that listing is it going to be you know
it's going to be somebody else that's
why I've always loved listing more than
anything in the world you do the work up
front let somebody else sell it now
moving over to the buyer side there are
a few more moving parts each one of
these parts is very important so it's
important that you follow the deal flow
that you don't skip any steps that's
usually where agents start getting
themselves in trouble when it comes to
the buyer side of the transaction now
initially the first thing we're going to
make contact with a buyer we're going to
identify which buyers in the market
within the next six months and the very
first thing is get that buyer agreement
sign we never ever ever take a client
out looking at a property without a
signed by our agreement and without a
pre-approval so that stands to reason
that the very first things you're going
to do is get a buyer agreement and then
we're going to work on the pre-approval
process once we've spoken with that
buyer we've done our comprehensive buyer
interview we've gone through all of
their their wants their needs their top
tens we've talked to them about the
buyer agreement and why that's important
for them and how that benefits them
we've also spoken with them about the
lender and why that's important to be
pre-approved prior to us going out then
it's time for them to actually speak to
the lender whether you conference that
lender in on a conference call three-way
with them or whether you send them to
the lender or if they've brought their
own lender to the table the next step is
for them to
actually apply with that lender so the
lender does the the application and at
that point there they're going to either
be pre-approved for a certain amount or
they're going to be unable to qualify
whether it's because of their debt to
income ratio was too high credit scores
weren't high enough they didn't have
enough money to close etc if they are
unable to qualify because of any of
those reasons then it's time to develop
a plan such as in a lot of lenders will
have plans as far as credit repair or we
need to figure out do they need a
cosigner to go on there and help them
with the purchase do they need to pay
off some credit cards to make sure their
debt to income ratio works etc whatever
it is it's causing them not to qualify
we need to come up with a plan and put
them on a nurturer campaign and make
sure that that lender is staying on top
of them and that they're moving towards
their creditworthiness goals to qualify
now if they do qualify right off the bat
that the lender is going to give a
pre-approval letter it's very important
that we have that pre-approval letter in
hand prior to going out and searching so
the next step from there is we have a
pre-approval letter we've done our
comprehensive buyer interview so we know
exactly what they're looking for we know
exactly how much they're qualified for
now never never never take them out
looking at properties above what they're
qualified for because you're just going
to end up disappointing your buyer at
that point and they're going to become
very frustrated and not buy anything so
from there we're going to take them out
looking and we're actually going to send
them the all of the homes within their
buying criteria and their price range
we're going to have them narrow that
down to their top ten from there we're
going to ask them which ones are their
top five favorites out of those ten and
of those top five we're going to let
them know these are the ones we're going
to go look at but we're going to look at
the top three first so let's narrow down
one more time this lets them know that
they are looking at the three best
properties on the market first so that
they don't have a need to have to see
everything in the market before making
a decision now that we've looked at the
top properties on the market and they've
indicated an interest in making an offer
and it's time to actually put together
and craft the offer itself so we're
going to find out what are our terms of
our offer are going to be settlement
date how much of a deposit are we going
to put down is there a seller
contribution towards closing costs that
they need etc and we're going to take
the disclosures that the seller provided
us initially and then we're going to
take our offer in in a purchase contract
and we're going to mix those two
together and submit that in the form of
an offer this is actually the exciting
part where the two sides finally
converge into one as the buyer's agent
you're going to have your offer in hand
and signed with everything ready to go
including a copy of the deposit check
and the pre-approval letter you're going
to submit that to the listing agent at
this point here this is where the really
exciting part of the transaction begins
it's the negotiations this is where you
either save or make your client a lot of
money so now we're in the negotiations
phase of the process the buyer's agent
has submitted the offer as well as a
copy of the pre-approval letter and a
copy of the earnest money deposit check
to the listing agent at this point here
the listing agent submits this to the
seller comes up with a response of
either they're going to accept that
offer they're going to counteroffer with
a different price or terms or they're
going to reject the offer outright
without a response so then it goes back
to the buyer's agent who then checks in
with the buyer for whatever their
response is and that can go back and
forth a couple times until there's a
meeting of a month of the minds and
they've agreed upon the price and terms
once the price and terms have been
agreed upon and the offers then signed
by the seller we now have a ratified
contract and we then move into the next
phase which is contract to close as we
move into the contract to close phase
things start moving very quickly and
then there starts to
a lot of moving parts the main things to
deal with once the contract has been
ratified is the title company the loan
approval process the home inspections
and then the appraisal which is part of
the loan process we're going to break
that down here real quick so as soon as
that contract is accepted you're going
to submit a copy of that contract as
well as with that deposit over to the
title company as soon as possible
you're also going to make sure if you're
on the buyer side you're going to
immediately submit that same contract to
the lender so they can get started with
the loan approval process the buyers
then immediately going to contact their
insurance company and start the
homeowners insurance process now from
there once that loan officer has that
contract they're going to immediately
order the appraisal the appraisal is
going to be done within say one week of
it being ordered the appraiser is going
to come out to the property they're
going to look at comparable sales and
they're going to determine a value on
that property the loan is then going to
go through underwriting where the
mortgage underwriter is going to go
through and make sure that all of the
things they were submitted during the
pre-approval process such as the w2's
pay stubs tax returns that those things
all actually match and are verified and
work for this particular loan they're
going to make sure that the credit
scores are still good the debt to income
ratio fits the guidelines for that
particular lending program and that we
have enough funds to close and finally
they're going to issue a loan approval
and it clear to close prior to closing
back to the inspections as soon as that
contract is accepted if you're working
on the buyer side as a buyer's agent
you're going to order the home
inspection with your inspector now
generally you're only going to have
between seven and ten days to actually
have that inspection done and then
submit any requests for repairs if any
to the listing agent so you'll have the
home inspection completed you're going
to review that home inspection report
and if there are any items that need to
be repaired you're going to make an
addendum and you're going to submit that
over to the listing agent now the let's
go through
title work real quick also so your is
same thing as soon as that contract is
accepted you're going to submit that
contract to the title company in the
state of Maryland the buyer has the
choice of title companies so the title
company is then going to go through do
the title search preliminary title
report and make sure there are no
problems there on the seller side just
as above in the sales process the seller
has very little to do in the contract a
closed section really you're just going
to make sure that all the disclosures
that are required by law were provided
you're going to facilitate entry into
the home for the home inspector please
don't have your sellers be there it gets
awkward
also finally once the buyer's agent has
submitted any requests for repairs if
any the listing agent is going to take
that to the sellers and then they're
going to negotiate one more time you're
either going to accept whatever their
repairs they're requesting and have a
contractor do those repairs or you're
going to negotiate some sort of a seller
credit to the buyer so they can do the
repairs themselves after closing
either way it's whatever the buyer and
seller agreed to so there's that one
final little negotiation and then
finally once all of those moving parts
have been completed meaning ok we've
checked off the home inspection the
buyer and seller are good with all of
that the the insurance has been ordered
and sent to the title company that's all
good the the loan has gone through its
entire process and we have a clear to
close the property appraised all of that
finally were able to go to closing and
it's very important that we all of those
things have to happen by the date that
was in the contract that we agreed to
close by if not that and sometimes
lenders a little slow etc or there's a
problem we may need to extend the
settlement date but finally though we're
ready to close the lender sends over all
of its documents and requirements to the
title company and the the buyer shows up
with a buyer agent the seller shows up
with the sellers agent they meet at the
Tay
they sign all of the the closing
documents and finally we're closed the
seller will bring the the keys any
garage door openers important documents
things warranties for the appliances and
things they'll bring those things hand
them off to the to the buyer the buyer's
agent just prior to closing will take
their buyers and do a final walkthrough
to make sure that that property is in
the same condition on the day of closing
as it was when they put it under
contract that there's no new damage or
that the seller didn't move all of their
stuff out etc one and as long as
everything is good there is a courtesy
the the buyer's agent will actually
bring the lockbox to closing to give to
the listing agent so they don't need to
come back out to the property and get it
the keys are exchanged checks are
exchanged the buyers thrilled they have
a new home the sellers thrilled they got
their home sold and all is well with the
world now that is how the complete
transaction works from start to finish
if you have any questions let me know
down in the comments section thank you
very much for attending this training
session and we look forward to the next
one