Real estate transactions in California follow a pattern that is generally similar throughout the country. There may be unique requirements from state to state but the general steps for completing real estate transactions follow a common contour. The real estate agent for each party usually plays a key role in bringing the parties together and assisting in negotiating the terms and purchase price.
The agreement of sale is the main legal document that signifies that the parties have a legal obligation to complete the real estate transaction. The closing date will be included in the agreement. Soon after signing the agreement, the purchasers are obligated to obtain financing by a certain date in at least the amount listed in the mortgage contingency clause of the agreement. If financing is not obtained after the buyer makes a reasonable effort to apply, then the downpayment will be returned and the contract voided.
Some people may be surprised to learn that the purchase of a home is similar to other transactions in life: there is an element of give and take that often occurs. Even though the agreement has covered the details very well, there are always twists and turns that may occur between the date of the agreement and the final closing, which usually takes place in the title insurance agency's office. For one thing, a home inspection is usually carried out and certain issues are legally determined before the transaction is approved for closing. There may be required termite inspections, water tests and other evaluations of major structural systems. Some of these are legally required and others may be required by the lending institution.
In California as well as elsewhere, both the seller and the buyer must have a degree of flexibility in order to make the transaction work. Real estate transactions are not static or set in stone, and one deficiency may have to be fixed by the seller while the purchaser may agree to take care of one or more problems that are clearly minor. Where a serious problem arises that the parties cannot resolve, each side will likely turn to their respective real estate attorneys for guidance.