• Michelle Gonzalez

Real Estate Players - How many parties are involved in a real estate transaction?

If you’ve ever partaken in a real estate transaction, you know it takes a village to finalize this procedural journey. Some may call it tedious or even exhausting but I call it FUN! Who doesn’t love a fun party? Who loves party planning? Insert hand-raising

#emoji here. After contributing to countless real estate transactions from sales, purchases, leases, assignments, etc. I’ve concluded that every deal includes a detailed labyrinth that must come together to reach the endpoint. Think of it as if you’re planning a party, wedding or baby shower. Or your favorite video game you’re trying to win but can’t control every aspect from your controller. Every intricate minutia impacts the desired result and real estate is no different.


Educating the parties involved is key so I pinpointed the various common denominators involved in any given real estate transaction. The chart below designates the actual roles a crucial participant plays in completing a successful experience. Any given transaction includes 18 party planners with one goal in mind. From my experience, a knowledgeable real estate professional is crucial in maintaining all parties informed for the grand finale: Closing Day.


In no specific order, these are the roles and duties each party plays.


Escrow Agent: Company holding the escrow deposit (found on page 1 of the contract). The Escrow Agent is usually a real estate brokerage (listing or selling broker) involved in the transaction OR the Title Company. In certain cases, the escrow can also be held by the Buyer or Seller’s Attorney.

Title Company: Third-party agency usually chosen by the Buyer which will issue title and act as an intermediary between all parties. Unless specifically designated, the title company does not represent one party directly. The additional representation will incur further costs.

Property Inspector: Chosen by the buyer to inspect the property during the contract inspection period.

Lender: Chosen by the buyer, the lender will process the required paperwork to issue a mortgage to the buyer.

Appraiser: Independently hired by the lender, the appraiser plays a key role in assessing the market value of the property.

Underwriter: Employed by the lender, the underwriter’s key role is to approve/deny your mortgage based on the qualification of the financial documents provided to the loan originator/loan processor.

Loan

Originator: Employed by the lender, a loan originator will collect your personal financial documentation to pre-approve you for a mortgage. Once under contract, your loan originator will continue as a liaison between you, your loan processor and the lender.

Loan

Processor: Employed by the lender, a loan processor organizes your personal financials for the underwriter's review and final loan approval.

Closing

Department: Employed by the lender, the closing department will provide the final loan documents for your closing. This department interacts with the Title Company to arrange the last step to making your dream a reality and purchasing the property.

Insurance Agent: Chosen by the buyer to issue insurance policies as may be required by the lender.

4 Point Inspection: Often performed by the property inspector, the 4-point inspection is provided to the insurance agent to assess the quality and life expectancy of important property functions (electrical, plumbing, roof and structural components). The Wind Mitigation forms inspect the windows, doors and shutters. Both of these forms will provide accurate pricing and/or discounts to insure the property.

Seller: The seller is the person or entity listed on page 1 of the contract which will transfer title to the buyer. The Seller must provide accurate information on the property you are purchasing.

Buyer: The buyer is the person or entity listed on page 1 of the contract wishing to purchase a property. The buyer’s responsibility is to provide clear and accurate communication on purchase transactions especially regarding delays in loan approval and property condition.

Buying Agent: A licensed real estate professional which represents the buyer and the buyer’s best interests in a transaction. Also called: buyer’s agent, purchasing agent, buyer’s rep.

Buyer Agent Broker: If the buyer’s broker works for a third-party agency, the buyer’s agent’s broker is the entity entitled to the commissions collected on the day of closing.

Listing Agent: A licensed real estate professional acting as a listing agent represents the seller’s best interests in a transaction.

Listing Broker: If the listing agent works for a third-party agency, the listing agent’s broker is the entity entitled to the commissions collected on the day of closing.

Seller Attorney: Hired by the seller, the seller’s attorney will draft closing documents for the seller and represent the seller’s best interest in the transaction.

Buyer Attorney: Hired by the buyer, the buyer’s attorney will represent the buyer’s best interest in the transaction. Often, the buyer’s attorney is also the title company closing the transaction.


Regardless if you’re purchasing, selling or leasing commercial or residential property, the amount of parties involved to cross that finish line is not few. Do not fret, thousands of real estate transactions occur on a day-to-day basis. Even though this seems a bit tedious, the process is simple but the more informed all parties are, the better the transaction will flow. Make intelligent and informed choices when working with real estate professionals, your future self will thank you.

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