Typical Steps in an Iowa Real Estate Transaction

Typical Steps in an Iowa Real Estate Transaction

Below are steps typical in an Iowa real estate transaction. Each real estate transaction is unique and not all of these steps are incorporated into every transaction. This document is intended to give a general outline of a routine transaction and is not intended as legal advice.

1. A real estate transaction starts with a written Offer And Acceptance. This document sets forth the purchase price, earnest money, closing date and any other special terms and conditions. The offer is normally presented by the buyer to the seller. Once signed the offer is a legally binding contract.

2. After the Offer And Acceptance is executed the seller should locate their abstract to the property and have it brought up to date at their expense. The abstract is a summary of the real estate transactions affecting the property. The continuation is typically done by an abstract company and not the buyer or seller’s attorney.

3. After the abstract is continued it is delivered to the buyer’s attorney for a preliminary title opinion which is done at the buyer’s expense. This opinion will state whether title is marketable and note any corrective work necessary.

4. If there is any correction work needed that generally is addressed by the seller’s attorney.

5. If the property being sold has its own septic system there are certain requirements. In most situations it is required that the septic be pumped, the system be inspected and a report be prepared approving the system.

6. Once all title issues are addressed the seller has a deed prepared at their expense. The deed is the document that is recorded at the County Recorder’s Office and conveys title to the new buyer.

7. The next step is set up a specific time for closing. The closing may be handled by a realtor or the buyer or seller’s attorney. The agent responsible for closing the transaction will prepare a closing statement that reflects all funds received and disbursed.

Real estate taxes in Iowa deserve a special notation because they can be confusing. Our taxes are a year behind and paid in March and September of each year. When property is sold, the seller is responsible for taxes that have accrued but are not yet payable. For example, real estate taxes payable in March 2014 are for the period January through June of 2013.

The following reflects typical obligations involved in a real estate transaction unless otherwise agreed by the parties:

Seller Pays: First abstract continuation, deed preparation, deed stamps, tax pro-ration, closing attorney/real estate commission

Buyer Pays: Offer preparation, preliminary title opinion, recording fees