Step 1: Buyer's Representation
When you have found a client who would like to purchase real estate property, you may ask them to sign a BUYER REPRESENTATION AGREEMENT
This form is optional and is not required by our policy, but please note that the buyer may use another agent or make an offer by themselves even on a property you have shown them. You may not be able to receive a commission without this agreement.
Step 2: Purchase Contract/Offer
- Review the MLS report and follow the Listing Agent's instructions on submitting an offer.
- When the Buyer finds a property and would like to make an offer, you have to fill out and obtain signature(s) on a PURCHASE AGREEMENT.
- Send the RPA-Purchase Agreement (offer) to the Listing Agent. Attach forms BIA-A, AD, a pre-qualification letter if financing, a copy of the bank account summary with the down payment funds (or full purchase price if cash) and a copy of the earnest money deposit check. When the transaction calls for it, you may include an offer letter (click here for a sample).
- The seller can reject or accept your offer or send a counter offer. During the negotiation period you may use a COUNTER OFFER or ADDENDUM.
Step 3: Open Escrow/Title
- When all parties agree with the purchase terms and you have a fully executed contract, you can open an escrow. In many transactions the selling agent opens the escrow, however, in some cases it is chosen by the listing agent.
- The escrow/title officer must provide you information about the file (officer name, escrow/title file number, contact information, etc.) and also give you a receipt for the earnest money deposit.
- Once escrow/title is open, log in to tms.iprore.com and create a new transaction. Your files must be created within 48 hours of opening escrow.
- You may begin uploading completed transaction documentation and forms to your transaction file.
Step 4: Inspection/Disclosure Period
- Depending on the transaction type and your client's needs, you may be required to order different types of inspections (termite, home inspection, septic system, roof, plumbing, etc.), as well as fill out any forms to request or do so.
- The Listing Agent must provide additional disclosure forms and reports to the buyer within the time limits and as stated in the purchase contract.
- Prepare and send the following to the seller and escrow officer if you haven't yet at this point:
- Preapproval letter from the lender (Within 7 days)
- Proof of funds for down payment (Within 7 days)
- CONTINGENCY REMOVAL (Within 17 days or as otherwise agreed)
- IMPORTANT: Remember, once the contingencies are removed, your buyers are basically putting their deposit at risk. If the transaction is canceled by the buyers, AFTER the contingencies have been removed, it may be very difficult to get a refund of the earnest money deposit. Please make your buyer aware of this.
- Escrow/title will send the preliminary title report/title commitment to both agents and the lender. This must be received within seven days of an accepted offer.
- Complete any agent inspection disclosures required by your state's commissioner
- If the property is in a Common Interest Development you have to provide the HOA report CC&Rs for the buyer. Usually the escrow officer orders this report (ask them about it), but if not, use your state's standard forms to obtain.
- You must prepare all the required documents in the transaction checklist and obtain signatures.
- You must ensure that the buyer(s) receive all necessary reports and documents, obtaining all appropriate signatures. If any of the required forms are not received by the time agreed upon in the contract, you may send the seller a NOTICE TO SELLER TO PERFORM. Also, if the seller fails to perform an action by the date disclosed in the NSP, you may choose to cancel escrow using the appropriate form in your state.
- We have observed that the majority of escrows close late because of financing issues. Because of this it is critical that you stay in touch with your buyer's loan officer and make sure they are aware of the contingency removal date and closing date. It is also beneficial to be familiar with how the loan process is going, in order to be ready to help and support the buyer(s) if they need it.
- Stay in communication with the escrow/title officer, making sure that they have all the fully executed transaction forms and documents. Also, make sure their dates for contingency removal and closing of escrow are the same as yours. Ask the escrow/title officer to provide a preliminary or estimated closing statement (HUD) for the buyer.
Step 5: Closing Process
- It's very important to know that the only approved signature on any commission distribution instructions is the Broker's signature. Please instruct your escrow officer to prepare the instructions and send them to our office at email@example.com. The Broker will sign this form, fax it back to the escrow/title company and upload a copy to your transaction file. There is a penalty for signing the commission instructions yourself in place of the Broker. Please review the penalty section in the Independent Contractor Agreement for more information regarding these penalties.
- Assist your buyer(s) with the final inspection and fill out any verification of condition or final inspection as required by your state. This is typically done 3 to 5 days before the close of escrow.
- Escrow will provide the buyer(s) with an estimated closing statement for which the buyer(s) must transfer the required down payment to the escrow company. Make sure the buyers are aware that they'll usually be WIRING their funds to escrow a couple days before escrow is closing.
- Know where and when the buyer(s) are going to sign the loan documents. It's recommended that you assist the buyer(s) with signing. This will ensure that you will be available for assistance if a "last minute problem" arises. Help the buyer(s) obtain the keys, garage or gate opener, postal box key, etc., from the seller. Provide phone numbers for the utility companies. Moving to a new house can be challenging for a buyer. Provide as much support to your client as possible. Adding this step will generally help with receiving referrals.
- It's also a good idea to give the new owner a closing gift. The best gifts are household, long-term usable item with your name and contact information on them.
TRANSACTION MANAGEMENT SYSTEM
Sign in to our transaction management system at http://tms.iprore.com. Please upload fully executed documents as they're received. Tutorials and checklists are in the Transaction Management System to help get you familiar and guide you during the process of your transactions.