Here’s a rundown of everyone who’s involved in a typical transaction.
There are so many people involved in a real estate transaction in California, and oftentimes, buyers and sellers don’t have all the information they need before starting the process. So, what can you really expect? Exactly how many people are involved in a typical transaction?
Let’s start with the buyer and the seller, the two parties who will each have their representation—the buyer’s agent and the listing agent. Technically, in California, you’re allowed to do what’s called a “dual agency,” where one agent represents both parties. I’ve only done this a few times in my 10-year career because it’s admittedly a bit of a sticky situation.
With dual agency, transparency is key; an agent must remember that they have a fiduciary duty to the seller first and foremost, so their aim is to help them maximize their home sale through home project recommendations, superior marketing, staging, etc. I prefer representing one party at a time, so if a buyer were to come along and ask for my help while I’m in the midst of helping my seller, I’ll most likely hand this lead off to one of my other team members.
Assuming a traditional transaction with no dual agency going on, we’re looking at four people total so far. Now we have to factor in the escrow company, which acts as a middleman between the two parties. They collect all the paperwork and funds at the beginning so that your earnest money deposit is held in a neutral third party’s account until close. Upon closing, the title of the home will be legally transferred, which naturally brings us to the role of the title company.
During the transaction, you’ll likely only speak once with a title officer; when I represent the buyers, I recommend having a three-way call with a title officer so that they can explain if there are any encumbrances on the property (e.g., easements or property tax liens) or address other issues. Then we must introduce the transaction coordinator, or “TC.” The majority of agents like myself are really busy, so we prefer to pay somebody to prepare all the paperwork on our behalf. TCs are licensed real estate agents who love doing paperwork, are very patient, and willing to be there to answer your questions regarding the contract itself.
You might be thinking, “Well, if there’s a TC, why do I need to have my original real estate agent? Shouldn’t they be doing this work?” Make no mistake, your agent is really the guiding hand that’s moving the transaction along and providing the TC with what they need. For example, during the contingency period, your agent steps up and negotiates on your behalf or writes something called a “request for repairs.” Your agent is also required to perform a diligent visual inspection and sign off on what’s known as “the agent visual inspection disclosure”—your agent is the only one who can complete this disclosure required by state law.
Of course, no transaction is complete without a lender. A “lender” could mean a bank itself, a mortgage professional, a direct lender, or a mortgage broker. In addition to the lender who will be providing you with a mortgage, you’ll most likely be talking to a home warranty representative. We always recommend purchasing a home warranty; in fact, California even includes an opt in/out box for home warranties in its real estate contracts. Don’t forget that you’ll also be involving your insurance agent to provide coverage for the home itself, which is yet another person added to the mix. (If you get flood insurance, then you’ll most likely be involving another company).
In some instances, there may be lawyers helping to facilitate things and make sure the paperwork checks out, but I don’t suggest involving an attorney. (In other states, attorneys take the place of the escrow company as a middleman and are therefore required entities in a transaction).
As you can see, there are tons of people involved in real estate transactions. My recommendation is (and has always been) to sit down with a real estate professional first before entering into any sort of contract; have them explain this whole process to you once more but in greater detail so that you’re as prepared as can be.
If you’d like to discuss this process further, give me a call or send an email and I’d be more than happy to schedule a time to chat with you. I’m also here to help with any other real estate needs you may have, so please don’t hesitate to reach out! I look forward to hearing from you.
