Understanding Closing Costs: What to Expect During Your Real Estate Transaction

What Is a Real Estate Transaction?

A real estate transaction transfers property ownership from one party to another. It can be a sale, purchase, lease, or rental of a property. The process starts with the Offer to Purchase, followed by negotiation of terms and conditions, and ends with the closing.

Several parties are involved in a real estate transaction, including buyers, sellers, mortgage lenders, realtors, and lawyers. Each plays a crucial role in ensuring a smooth, successful transaction.

What does a real estate lawyer do?

A real estate transaction lawyer is a legal professional specializing in real estate law. They provide legal advice and guidance to clients buying or selling a property. A real estate lawyer can help with various aspects of a real estate transaction, including:

Reviewing the Offer to Purchase or Agreement of Sale to ensure it meets your needs and protects your interests.

Conducting a title search to ensure the property is free of liens or encumbrances that could affect the ownership or use of the property.

Drafting or reviewing legal documents, such as the title, mortgage, and conditions to ensure they’re legally binding and accurate.

Attending to the closing to ensure all legal requirements are met and the transaction is completed smoothly.

What Is a Closing Letter in a Real Estate Transaction?

A closing letter summarizes all the financial transactions involved in a real estate transaction.

Your closing letter will include the costs and fees associated with the transaction, including the purchase price, real estate agent commission, lender fees, and other closing costs. It also lists the debits and credits of the buyer and seller, such as prorated property taxes, prepaid expenses, and security deposits.

The closing letter outlines the final amount the buyer must pay to complete the transaction. It also ensures that all parties involved receive the correct amount of money.