5 Most Common Types of Real Estate Transactions

Learn about traditional, trust, probate, REO, and bankruptcy sales in real estate.

Real estate transactions come in different forms depending on the circumstances surrounding the sale. Each type has its unique process and can substantially impact how the deal is handled. Let’s go over the five most common real estate transactions you may encounter: 1. Traditional sale. A traditional sale is the most common type of real estate transaction. This occurs when a typical buyer and seller come together to negotiate and complete the sale. These transactions typically take about 30 to 45 days to finalize. 2. Trust sale. This type of sale happens when a property owner passes away, and the property is part of a trust or will. The property is transferred to the heirs, who are typically responsible for selling it. Unlike traditional sales, trust sales usually come without disclosures or repairs because the heirs may not be familiar with the property's condition.

"Understanding these different types of real estate transactions is essential for navigating the market."

3. Probate sale. If a property is not in a trust, it will go through probate. There are two ways a probate sale can happen:     a. Executor-led probate. If the deceased has an executor with full authority, the process can proceed like a traditional sale.     b. Court confirmation. If the executor doesn’t have full authority, the sale needs court confirmation. This allows for an overbid     process, which means potential buyers can offer more than the accepted price in court. However, probate sales can take an     additional 60 to 90 days to complete due to the court's involvement. 4. REO or foreclosure sale. A Real Estate Owned (REO) sale, also known as a foreclosure sale, happens when a property is foreclosed, and the bank takes ownership. In these situations, the bank becomes the seller, and the properties are typically sold with no disclosures. 5. Bankruptcy sale. The final type of transaction is a bankruptcy sale, often involving Chapter 7 bankruptcy. In this case, the seller has declared bankruptcy and a court-appointed trustee manages the sale of the property. Additionally, the trustee has the authority to sell the property. Understanding these different types of real estate transactions is essential for navigating the market. Whether it's a traditional sale, a trust sale, or even a bankruptcy sale, knowing what to expect can help make the process smoother. If you have any questions or need assistance with your real estate transaction, feel free to reach out to me at brianparsons@kw.com or call (626) 340-8050. I'm here to help you make informed decisions and achieve the best outcome for your property.