As a John L. Scott broker, you're part of one of the most respected, productive, and professional real estate networks in the industry
Every day, you’re faced with important decisions that shape the success of your business. The Foundations of Real Estate Success program is here to guide you through those early steps. This resource is designed to support your growth, offering foundational tools, strategies, and insights to help you build a thriving real estate career
Please keep in mind: Foundations of Real Estate Success is meant to be a reference guide its suggestions are key elements of your real estate education and professional development
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Disclaimer
This publication is intended to provide general information on the topics discussed and is for educational purposes only. It is provided with the understanding that neither the author nor John L Scott Real Estate is offering legal, accounting, or other professional advice
If legal or professional assistance is needed, please consult with a qualified expert. While every effort has been made to ensure the accuracy and usefulness of this material, no guarantee can be made regarding its proper application, and John L Scott Real Estate assumes no liability for its use or interpretation
TRANSACTION FLOW: MILESTONES, PAPERWORK, AND CONTINGENCIES
This module provides an overview of the transaction process from listing to closing, including the critical milestones, required documents, and key sale contingencies. You’ll also find helpful flow diagrams that outline the step-by-step progression of both listings and sales, based on your role in the transaction
New Listing
When taking a new listing, a fully signed Listing Agreement (employment contract) and all accompanying documentation must be submitted to the office via Paperless Pipeline within 72 hours of mutual agreement between the seller and the listing broker Be sure to include a completed Transaction Cover Sheet.
Refer to the “New Listing” flow chart for a breakdown of required documents and submission order
New Sale
Once the buyer and seller reach mutual agreement on terms and conditions, the transaction enters a time-sensitive phase It’s your responsibility as the real estate professional to guide your client through each step with clarity, timeliness, and professionalism.
While clients are ultimately responsible for their decisions and obligations, your leadership and organization are essential to ensuring a smooth closing
Tip: Emotions can run high during this phase Your calm, fact-based communication will help your clients feel informed and confident
Submitting Sale Documents
When a transaction is mutually accepted: Submit a fully signed Purchase & Sale Agreement and all associated documents to the office via Paperless Pipeline within 72 hours Include a completed Transaction Cover Sheet
Refer to the appropriate flow chart: “New Sale – Not Your Listing” “New Sale – Your Listing”
As the transaction moves forward, be sure to upload any subsequently signed documents, disclosures, and inspection reports into Paperless Pipeline as they are created or received
Transaction Calendar: Setting Expectations Early
Early in the process, meet with your client to go over key transaction steps and timelines Use a calendar or timeline tool to map out all important dates, deadlines, and deliverables
Recommended items to include:
Earnest Money Deadline
When and how will it be deposited?
Seller Disclosure Review Deadline
Confirm deadline for buyer approval or disapproval
Inspection Scheduling and Results Deadline
Coordinate inspection appointments
Track the deadline for repair negotiations or disapproval
Includes exceptions like CC&Rs, easements, or encroachments
Loan Appraisal Deadline
Lender Disclosure Timeline
Encourage clients to provide all lender-requested documentation promptly
Closing Process Overview
Provide a summary of what to expect during escrow and closing
Include title/escrow contacts and key points for coordination
Moving Logistics
If applicable, help clients plan for notice to tenants, utility transfers, packing, and possession timelines
Establishing clear expectations early and maintaining consistent communication throughout the transaction sets your clients up for a positive experience and helps ensure on-time, stress-free closings.
As a broker with John L Scott Real Estate, maintaining clear communication and timely document delivery is essential to ensure every transaction progresses smoothly This section outlines key responsibilities related to opening escrow, supporting the buyer’s loan process, and managing the inspection contingency
Opening Escrow
The listing broker is responsible for opening escrow by submitting a fully signed Purchase & Sale Agreement and all related addenda to the designated escrow officer as soon as mutual acceptance is reached
As the transaction progresses:
Send any newly signed addenda to escrow immediately
Provide accurate contact details for both clients and brokers, including:
Full names
Mailing addresses
Day and evening phone numbers
Email addresses
Clear, accurate information ensures a smooth communication flow between all parties throughout the escrow process.
Earnest Money Deposit
The buyer’s broker is responsible for ensuring that the earnest money deposit is delivered on or before the deadline specified in the Sale Agreement
Once received, the escrow or title company will issue a receipt of deposit, which should be retained as part of the transaction file and uploaded to Paperless Pipeline
Final Loan Approval Process
The buyer’s broker plays a critical role in keeping the financing timeline on track
Key responsibilities include:
Transmitting the fully executed Sale Agreement and any addenda to the buyer’s lender immediately upon mutual agreement
Forwarding any newly signed documents to the lender promptly throughout the transaction
Encouraging the buyer to meet with the lender early to begin the final approval process
Maintaining open communication with the lender to offer support and ensure the transaction stays on schedule
Pro Tip: Timely collaboration between the broker, buyer, and lender is essential to avoid delays in closing.
Inspections and Contingency Timelines
The inspection contingency period outlined in the Purchase & Sale Agreement is the designated window for the buyer to:
Order and complete any desired inspections
Review results
Negotiate repairs (if needed)
Confirm approval or disapproval
Request an extension (if required)
It is the buyer’s responsibility to ensure all inspection-related tasks and negotiations are completed within the contingency deadline.
The broker coordinating the inspections is responsible for:
Scheduling at a mutually agreeable time for the buyer, seller, and inspector(s)
Keeping all parties informed of the date and process
Ensuring smooth access and professional conduct throughout the inspection appointment
Important: Do not forward inspection reports to the listing broker unless they are specifically requested
INSPECTION REPORTS, DISCLOSURES, AND CONTINGENCY PERIODS
Proper handling of inspections and disclosures is essential to a smooth transaction As a John L Scott broker, your responsibility is to help your clients understand key timelines and documents, and ensure all parties stay informed throughout the process
Inspection Reports and Contingency Timelines
Inspection reports are typically available within 24–48 hours of the inspection If the listing broker ordered the inspection, the report should be promptly forwarded to the buyer’s broker
As the buyer’s broker:
Review the report(s) thoroughly
Schedule a time to discuss findings with your client
Identify any potential issues and guide your client through the options
Important: All repair negotiations must be completed before the expiration of the inspection contingency period outlined in the Purchase & Sale Agreement.
If additional time is needed:
The buyer must request an extension of the inspection contingency period
The seller is not obligated to approve the extension prepare your client accordingly
Also, ensure the buyer’s lender is kept informed of the inspection schedule and any relevant outcomes, as they may impact underwriting or appraisal considerations
Seller’s Property Disclosure Statement (Form 17)
This is a state-mandated form required for the sale of most residential properties (1–4 dwelling units) It is not required for vacant land
Exemptions:
The exemption section (Section 1) may be used only in specific situations:
The first sale of a never-occupied home (eg, new construction) Court-appointed sellers (eg, personal representative of an estate)
Note: A landlord or investor who has not occupied the property is not exempt and must still complete the disclosure form
Timeline and Buyer Rights:
The buyer has 5 business days from receipt of the disclosure to approve or disapprove
As the buyer’s broker:
Review the form with your client
Address any concerns or questions
Send written questions to the listing broker for clarification (in writing)
If the buyer disapproves of the disclosure during the 5-day period:
They must provide written notice to the seller
The buyer may terminate the agreement and is entitled to a full refund of any earnest money deposited
Lead-Based Paint Disclosure Addendum
This federally required form must be completed for:
Residential properties built before January 1, 1978
Mixed-use properties with residential components (eg, apartments above commercial space)
Seller’s Responsibility:
Disclose any known presence of lead-based paint or prior lead testing
Provide the buyer with:
A completed Lead-Based Paint Disclosure Addendum
The federal pamphlet, “Protect Your Family from Lead in Your Home”
Buyer’s Options:
The buyer must indicate one of the following:
Waive the opportunity for a lead-based paint inspection
Accept the opportunity to conduct a lead-based paint risk assessment and/or inspection
If the buyer chooses to conduct an inspection:
A 10-calendar-day contingency period begins once both parties sign the addendum
The buyer may cancel the transaction in writing within the contingency period and receive a full refund of earnest money
FINANCING CONTINGENCY, APPRAISAL, TITLE, AND RELEASING CONTINGENCIES
Understanding key contingency timelines is essential to managing a successful real estate transaction As a John L Scott broker, your attention to these details ensures your clients remain protected and that transactions move forward efficiently and compliantly
Financing Contingency & Loan Appraisal
The Purchase & Sale Agreement requires the buyer to make a good faith effort to order the loan appraisal no later than the expiration of the Inspection Contingency Period (outlined in Section 10 of the Agreement)
Because appraisals typically require prepayment by the buyer, lenders may be hesitant to order them too early, especially if there’s uncertainty about the transaction proceeding For this reason, the buyer’s broker must closely monitor this deadline and coordinate with the lender to ensure the appraisal is ordered in time to meet contingency requirements
Appraisal Outcomes and Buyer Options:
If the appraised value is less than the purchase price:
The buyer and seller have 2 business days (unless modified in the contract) to renegotiate and agree on how to proceed.
If no agreement is reached, the buyer may terminate the transaction with written notice to the seller
If the appraisal includes conditions that cannot be met (e.g., required repairs):
And if the loan cannot be approved due to those conditions, the buyer may also terminate in writing
If the buyer is ultimately unable to obtain loan approval:
The buyer may cancel the sale by providing written notice to the seller A letter from the buyer’s lender may be required to confirm the financing denial. Upon termination under the financing contingency, any deposited earnest money is refunded to the buyer
Preliminary Title Report
The title company will issue a Preliminary Title Report within 5 to 10 business days after escrow is opened This report outlines the legal status of the property, including recorded liens, easements, CC&Rs, and other encumbrances
Some title companies will automatically include copies of non-standard exceptions. If not, the broker should request documents such as:
CC&Rs (Covenants, Conditions, and Restrictions)
Easements
Recorded judgments or liens
Buyer’s Review Timeline:
The buyer has 5 business days (unless otherwise stated in the Purchase & Sale Agreement) from receipt of the report and exceptions to submit written objections to the seller
The seller then has 5 business days to address the objections, either by removing the items or resolving the concerns.
If the seller is unable or unwilling to resolve the title objections, the buyer may:
Terminate the sale in writing
Receive a full refund of their earnest money deposit
Releasing Contingencies
As a best practice, buyers should release contingencies in writing once they’ve completed their review and are satisfied
Important: If the buyer does not formally release a contingency before the deadline, it is treated as if they have accepted the report or condition. At that point, the buyer forfeits the right to object or terminate based on that contingency
Keeping contingency releases documented and timely protects all parties and ensures clarity as the transaction progresses
Next Steps: Transaction Flow Charts
Refer to the flow charts on the following pages for a detailed breakdown of required documentation, key milestones, and procedural steps throughout the transaction process
