What Are the Key Documents in a Real Estate Transaction?

What Is a Real Estate Transaction?

A real estate transaction is the legal process by which a buyer and seller transfer property ownership. It includes negotiating terms, signing a contract, conducting inspections, arranging financing, and closing the deal. Key documents—such as the purchase agreement, deed, title report, and disclosure forms—protect both parties’ rights and clarify responsibilities. Understanding these papers helps prevent misunderstandings, delays, and legal issues so the transaction moves smoothly from start to finish.

Key Documents in Real Estate Transactions

Listing Agreement

A listing agreement is often one of the first documents in an agent-assisted sale. It is a contract between the property owner (seller) and the real estate agent who will market the home. The agreement describes the property, sets the asking price and listing period, and states the commission and each party’s responsibilities. In South Carolina, most residential sellers provide the Residential Property Condition Disclosure Statement on a statutory form (subject to exemptions). For homes built before 1978, federal law requires a Lead-Based Paint disclosure and pamphlet where applicable. The listing agreement authorizes the agent to represent the seller and promote the property.

Purchase Offer

A purchase offer is the buyer’s formal proposal to buy the property under stated terms. It sets the offered price and common conditions, such as inspection periods, financing deadlines, and appraisal timing. The seller can accept, reject, or counter the offer, and negotiations may follow. Once signed by both parties, the offer becomes a binding agreement or is incorporated into a formal sales contract that governs the transaction.

Purchase Agreement or Sales Contract

The purchase agreement is the legally binding contract that finalizes the deal between buyer and seller. It includes the price, deposit terms, closing date, contingencies (such as financing and inspection), and other deadlines. South Carolina requires most residential sellers to deliver the state’s Residential Property Condition Disclosure Statement, subject to statutory exemptions. In South Carolina, title examinations and real-estate or mortgage-loan closings are the practice of law and must be conducted under the supervision of a South Carolina attorney, including the title work and the closing itself, with recording and disbursement handled under that supervision. Once signed, the agreement acts as a roadmap for the rest of the transaction, so each step follows the agreed-upon terms.

Due Diligence Documents

Due diligence helps the buyer understand the property’s condition and any risks before closing. Typical documents include home inspection reports, environmental assessments (when appropriate), and surveys that show boundaries, easements, and encroachments. These materials can reveal issues such as structural problems, moisture or mold, or soil and drainage concerns. Reviewing the findings allows buyers to request repairs, negotiate credits, or adjust the purchase price and closing timeline. Thorough diligence helps prevent unexpected costs after the sale.

Title Report and Title Insurance

A title search or title report shows the property’s ownership history and flags recorded matters—such as liens, unpaid taxes, or claims—that could affect marketable titles. Based on that exam, parties typically obtain title insurance: a lender’s policy (usually required when there is a mortgage) and an optional but recommended owner’s policy that protects the buyer’s ownership interest. The title search identifies recorded matters, while title insurance protects against certain undiscovered defects—such as forged documents or recording errors—that may arise after closing. In South Carolina, a closing attorney typically conducts or oversees the title work and coordinates the title insurance.

Deed

The deed is the legal document that transfers ownership from seller to buyer. It states the parties’ names, the date of transfer, and a legal description of the property. In South Carolina, to be recorded, a deed must be signed by the grantor in the presence of two witnesses (one of whom may be the notary), and the grantor’s signature must be acknowledged before a notary public or other authorized officer. After closing, the attorney typically records the deed with the county Register of Deeds or Clerk of Court, which provides public notice and establishes priority under the recording statute. The recorded deed serves as legal proof of ownership and is typically required by title companies and lenders for future sales, insurance, or financing; recording also establishes priority under South Carolina’s recording statute.

Closing Disclosure or Settlement Statement

The closing disclosure or settlement statement lists the final numbers for the transaction. It itemizes closing costs, lender fees, taxes, insurance, and adjustments between the parties. For most closed-end consumer mortgages, the borrower must receive the Closing Disclosure at least three business days before consummation (the date the borrower becomes contractually obligated on the loan under state law; in most residential transactions, this coincides with the closing). Cash and other non-TRID transactions commonly use an ALTA-style settlement statement instead. Reviewing these documents confirms the amounts due and that contract terms have been met before the transfer is finalized.