While the real estate purchase contract undergoes the title and escrow process, the buyer's agent must monitor the transaction to ensure a successful close of escrow. During the first few days (See Part 5 of this Series), an earnest fund receipt must be received, proof of funds delivered to the listing agent if not already part of the real estate offer, disclosures received per the time frame within the real estate purchase contract.
Next comes confirming the schedules for the various inspections which may be none if the real estate purchase is vacant land to several as noted in Part 5 of this series She Works Hard for the Money.
Within the first 3-5 days after Escrow has been opened, the Title and Escrow firm will mail a Preliminary Title Commitment report is usually received within 3—5 days. This report looks uncover:
- Any obvious liens against the property
- The status of paid or upaid property taxes
- Exceptions to the property such as CCRs, Past Deeds, Plat Maps
The goal is to quickly learn if the title is “clean” that being free from any obstacles that would prevent a successful close of escrow (COE). Reading this Preliminary Title Commitment and downloading all links to be read, as well, may take one or more hours. READ MORE: The Devils Is in the Details of the Preliminary Title Commitment.
TIME INVESTED: Minimum of 1.5+ hours
If a loan is involved in the purchase, monitoring the status of the loan (how it progresses through the various departments within the lending institution) is another monitoring function. In AZ, a weekly loan status update (LSU) is part of the contract. The Buyers Agent often must request these “LSUs from the lender especially those lenders not familiar with AZ purchase contracts.
TIME INVESTED: Minimum of 1 hour
Now the buyers agent must be present at all inspections. For home inspections, there are usually at least two inspections and sometimes more depending upon the initial home inspection report.
TIME INVESTED: Minimum of 3 to 5 hours or more
After the home inspection is completed, the buyers have the opportunity to ask for repairs if necessary to be completed by the sellers at their expense. Often this requires more reading and negotiation time by the buyer’s agent.
TIME INVESTED: Minimum of 2 hours
If both the sellers and the buyers negotiate repairs to the satisfaction of both parties, an appraisal will be scheduled. The buyer’s agent will update all comparables and leave that document inside the house for the appraiser. Additionally, the buyer’s agent may be present during the appraisal as well as the listing agent.
Here the buyer’s agent may have conversations with the lender to ensure that the appraiser is from the area and knows current market conditions.
If the appraisal inspection report does not meet the purchase price, more negotiations may be involved. If no agreement happens between the parties, the offer to purchase is rescinded. The buyers lose any funds they have invested and the buyer's agent receives no compensation for all efforts expended.
TIME INVESTED: Minimum of 3 hours
If a loan is involved, the buyer’s agent often reminds the buyers not to buy any large ticket items that would be reflected on a last minute “pull” of the buyers’ credit report. Also, there are often numerous other communications for information being asked of the buyer’s agent such as local utilities contact information, county or city contact information, local contractors, etc.
Even without a loan, in AZ, the contract also requires the submission of any insurance claims made against the property during the last 5 years. This too must be requested by the buyer’s agent to the listing agent if not already received.
Finally, any additional requirements of the contract must be monitored such as if a the property is in a Home Owner's Association, receipt and submission of any additional documents, etc.
TIME INVESTED: Minimum of 3+ hours
From the ongoing tally at $1,750, the hours for Part 6 conservatively are 14.5 at $100 an hour, the new total is $3,200 for 32 hours again with No Compensation Being Received.
P.S. No two real estate transactions are the same. All times are conservatively estimated. Additionally, the buyer's agent must continually update the broker's file as well as the Customer Relationship Management System (CRM).
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