# Usage: curl -sSL https://seed.show/real.estate.transaction | bash -s <install-path>
# <install-path> is the directory where the file should land.

set -euo pipefail
[ -z "${1:-}" ] && {
  echo "install requires a path: curl -sSL https://seed.show/real.estate.transaction | bash -s <install-path>" >&2
  exit 1
}
TARGET="$1"
mkdir -p "$TARGET"
DEST="$TARGET/seed-fold.jdJGjq.folded.md"

cat > "$DEST" <<'PORTDOWN_6ABF6A8E'
<!--
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---
fold: true
marker: 1bc008
at: 2026-05-07T16:16:22Z
root: seed-pack.rwtghC
---

<!--fold:1bc008@file path="README.md" mode="644"-->
# real.estate.transaction

US residential real estate transaction context for agents. Covers what to know before advising on any stage of a purchase or sale.

**What not to hallucinate:** Interest rates, conforming loan limits, and state-specific closing cost percentages change annually — do not state them as facts. Point users to current sources (see sources.md). The transaction structure, contingency mechanics, title chain, and escrow rules covered here are structurally stable.

**What this is for:** Any AI agent advising on a home purchase, sale, or the transaction stages between them. Read this before generating contract advice, contingency guidance, closing cost estimates, or title explanations.

---

## Mental model: a chain of contingencies, each one a termination point

A residential transaction is not a linear countdown to closing. It is a sequence of gates. Each gate has a deadline, a decision (proceed / negotiate / exit), and a default if the deadline lapses without action.

```
Offer accepted
  → Inspection contingency      (typically 7–14 days)
  → Financing contingency       (typically 21–45 days)
  → Appraisal contingency       (tied to financing timeline)
  → Title contingency           (resolved at or before close)
  → Close of escrow / closing
```

Every gate is a potential exit. Exercising a contingency before its deadline means the buyer can exit without forfeiting earnest money. Once a deadline lapses without action, the contingency is typically waived by default — the buyer's exit right disappears and earnest money is at risk. Missed contingency deadlines are not formalities. They are binding.

The transaction can collapse at any gate. Good advice requires knowing which gates remain open at any point in time.

---

## What agents get wrong

**1. Contingency deadlines are real.**
Agents routinely give advice without first establishing which contingencies remain active. In competitive markets, buyers sometimes waive inspection or appraisal contingencies to strengthen offers. This is a real legal choice — not a preference or stylistic decision. Before advising on any risk or next step, determine: which contingencies are in the contract, which have been waived, and which have already expired.

**2. Attorney-close vs. escrow-close states.**
In roughly 20 states, a licensed attorney must conduct or supervise closing. In the rest, closings are handled by escrow and title companies. Applying escrow-state instructions to an attorney-close state (or the reverse) produces legally incorrect guidance. State law controls. Always identify the state before explaining closing mechanics.

Attorney-close states (verify locally — this list is not exhaustive and classification can be contested): Alabama, Connecticut, Delaware, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Rhode Island, South Carolina, Vermont, Virginia, West Virginia.

**3. Title insurance: two policies, not one.**
- **Lender's policy (loan policy):** Required by nearly all mortgage lenders. Protects the lender's interest. The buyer typically pays, but the lender benefits.
- **Owner's policy:** Optional but strongly advisable. Protects the buyer's equity against title defects that predate the purchase — forged deeds, undisclosed liens, errors in public records, unknown heirs.

A lender's policy does not protect the owner. Buyers who skip the owner's policy may believe they have coverage when they do not. Agents frequently describe "title insurance" as a single item; the distinction is material.

**4. Earnest money: forfeiture turns on why and when.**
Earnest money (also called good faith deposit) is held in escrow by a title company, escrow company, or (in attorney-close states) an attorney's trust account — not by the real estate agent or brokerage unless specifically authorized.

Forfeiture depends on which contingencies remain active:
- Buyer exits during a valid contingency period → earnest money returned.
- Buyer backs out after all contingencies are removed → earnest money typically forfeited to the seller.
- Seller backs out after accepting → earnest money returned; seller may owe additional damages.

Agents frequently conflate "we're past inspection" with "earnest money is safe." Financing and appraisal contingencies may still be live. Confirm which contingencies remain before making any statement about earnest money risk.

**5. Closing costs: point to a current source, not a number.**
Closing cost components are structurally stable (lender origination fees, appraisal, title search, title insurance, escrow or attorney fees, prepaid interest, homeowners insurance prepaid, property tax escrow setup, recording fees). The amounts — as a percentage of purchase price — vary by market, lender, and year. Do not state a percentage as current fact. Instead, reference the CFPB Loan Estimate form (delivered within 3 business days of loan application) as the binding disclosure the buyer should be reviewing for their specific transaction.

Tolerance thresholds: actual closing costs cannot deviate from the Loan Estimate by more than specific CFPB-defined thresholds. The Closing Disclosure, delivered at least 3 business days before closing, shows final figures.

**6. The title-deed distinction.**
Title is the legal right of ownership — an abstract concept. A deed is the physical document that transfers title from seller to buyer and is recorded in the public record. Agents frequently use these interchangeably. "Clear title" means no encumbrances or disputed ownership claims; it is not the same as having a deed in hand. A title search examines the chain of recorded deeds and instruments to establish whether the seller can convey clear title.

---

## Stable facts

**Standard contingency types:**
- **Inspection (due diligence):** Buyer's right to have the property professionally inspected and to negotiate repairs or exit.
- **Financing (mortgage contingency):** Buyer's right to exit if they cannot obtain financing on specified terms.
- **Appraisal:** Buyer's right to exit or renegotiate if the property appraises below the purchase price.
- **Title:** Buyer's right to receive clear, marketable title free of undisclosed encumbrances.
- **Sale contingency:** Buyer's right to exit if their existing home does not sell by a specified date. Less common in competitive markets.

**CFPB Loan Estimate:** Lenders must deliver this form within 3 business days of a completed loan application. It shows estimated loan terms, projected payments, and estimated closing costs. Buyers should use it to compare lenders and to understand what they will owe at closing.

**CFPB Closing Disclosure:** Delivered at least 3 business days before closing. Shows final loan terms, closing costs, and cash to close. Buyers have a legal right to this review window; closings cannot be moved earlier without triggering the 3-day clock again if material changes occur.

**What "as-is" actually means:**
- Seller will not make repairs and buyer accepts the property in its current condition.
- Does NOT eliminate the buyer's right to inspect during the inspection contingency period.
- Does NOT relieve the seller of disclosure obligations.
- Protects the seller from repair demands after the inspection period, not from the buyer walking away during it.

**Seller disclosure obligations:**
Most states require sellers to disclose known material defects: structural issues, water damage, lead paint (federal requirement for pre-1978 homes), HOA disputes, and more. Scope varies by state. "As-is" does not waive the seller's disclosure duties — it only affects post-inspection repair obligations.

**Escrow mechanics:**
Escrow is a neutral third-party holding arrangement. The escrow holder (title company, escrow company, or attorney) receives the purchase funds and documents, verifies all conditions of the contract are met, and releases funds and records the deed only when both parties have satisfied their obligations. Escrow is not the same as closing — closing is the event; escrow is the mechanism.

---

## What AI is changing

**Automated valuation models (AVMs):** Tools like Zillow's Zestimate, Redfin's estimate, and lender-integrated AVMs generate property value estimates from public records and comparable sales. They are used by agents for preliminary pricing, by lenders to pre-screen properties before ordering an appraisal, and by buyers to gut-check listing prices. AVMs are directional, not binding — actual appraisals conducted by licensed appraisers (required by most lenders) can and do differ materially, especially for unusual properties or thin comparable markets.

**Contract review and red-flag extraction:** AI can identify non-standard clauses, flag missing contingencies, and surface problematic terms in purchase agreements. This is an accelerant for attorneys and experienced agents — it does not replace legal review. Jurisdiction-specific enforceability, negotiation context, and the interplay between lease terms and state statutes require human judgment. AI contract review catches what's there; it doesn't reliably know what's missing.

**Title search assistance:** AI tools are beginning to assist with preliminary title searches by processing recorded documents at scale. Full title search and title insurance commitment still requires a licensed title professional. Automated tools surface candidates for review, not conclusions.

**Disclosure extraction:** AI can extract disclosure items from seller disclosure forms and flag potential gaps or inconsistencies. Useful for flagging what a disclosure form addresses; it cannot evaluate whether a disclosed condition rises to a material defect under applicable state law.

**What stays human:**
- Negotiation strategy and reading the other side's position.
- Inspection judgment — a home inspector's assessment of severity and urgency for defects found.
- Financing underwriting — lender credit decisions, appraisal calls, and exception handling.
- Legal advice on enforceability, liability exposure, and dispute resolution.
- Anything requiring a licensed professional's signature or legal standing in the jurisdiction.

**How agents should frame AI-assisted transaction advice:**
AI can structure the contingency landscape, surface applicable rules, and draft communications. It should not generate specific legal advice for a given transaction, state a current interest rate as fact, or predict whether an appraisal will come in at value. Scope AI output to the structural and procedural; route specific decisions to licensed professionals.
<!--fold:1bc008@file path="sources.md" mode="644"-->
# sources

Fetch at task time. Ordered by importance. Do not state rates, limits, or percentages as current facts — use these sources to obtain current figures.

1. **CFPB — Know Before You Owe** — Loan Estimate and Closing Disclosure rules, tolerance thresholds, 3-day delivery requirements. The canonical source for what lenders must disclose and when:
   https://www.consumerfinance.gov/know-before-you-owe/

2. **CFPB — Closing Disclosure explainer** — Annotated form showing what each line item means and how it relates to the Loan Estimate:
   https://www.consumerfinance.gov/owning-a-home/closing-disclosure/

3. **CFPB — Your Home Loan Toolkit** — Step-by-step homebuyer guide covering the full transaction sequence from application through closing:
   https://files.consumerfinance.gov/f/201503_cfpb_your-home-loan-toolkit-web.pdf

4. **Fannie Mae Selling Guide** — Appraisal requirements, acceptable appraisal methods, appraisal waiver eligibility (automated collateral evaluation). Current conforming loan limits are published here annually:
   https://selling-guide.fanniemae.com/

5. **FHFA — Conforming loan limits** — Updated annually. Do not use last year's limit:
   https://www.fhfa.gov/data/conforming-loan-limit-values

6. **ALTA — Title insurance consumer explainer** — Owner's vs. lender's policy distinction, what title insurance covers and does not cover:
   https://www.alta.org/title-insurance/

7. **HUD — Settlement Costs booklet** — Historical RESPA-era framing; useful for understanding the regulatory background of closing cost disclosure:
   https://www.hud.gov/sites/documents/SETTLEMENT_BOOKLET.PDF

8. **State bar association locators** — To confirm whether a given state requires attorney presence at closing and to find licensed real estate attorneys in the jurisdiction:
   https://www.americanbar.org/groups/legal_services/flh-home/flh-bar-directories-and-lawyer-finders/

9. **HUD — Approved housing counselor search** — For buyers who need neutral guidance on any stage of the transaction, including financing options and down payment programs:
   https://www.hud.gov/findacounselor

10. **NAR — State-by-state closing attorney requirement reference** — Cross-reference with state bar to confirm attorney-close status:
    https://www.nar.realtor/
<!--fold:1bc008@file path="workflow.md" mode="644"-->
# workflow

The residential purchase transaction as a timeline. Each stage: typical duration, what can terminate the deal, and the key decision points.

---

## Stage 1: Offer and acceptance

**Typical duration:** Hours to days.

**What happens:** Buyer submits a written purchase offer specifying price, earnest money amount, contingencies, and a proposed closing date. Seller accepts, counters, or rejects. Acceptance requires a signed, written agreement — verbal acceptances are not binding in real estate.

**What can go wrong:**
- Competing offers change the terms required to win.
- Seller counter-offer is rejected by buyer or times out.
- Material terms (price, contingencies, closing date) are not agreed in writing.

**Key decisions:**
- Which contingencies to include or waive. Waiving inspection or appraisal strengthens the offer but removes exit rights. This is a legal decision with financial consequences, not a bidding tactic.
- Earnest money amount. Higher earnest money signals commitment; lower earnest money limits buyer risk if the deal falls apart outside a contingency.
- Closing date. Must be realistic given financing timelines (typically 30–45 days from offer acceptance for a conventional loan).

---

## Stage 2: Earnest money deposit

**Typical duration:** 1–3 business days after acceptance (contract specifies the deadline).

**What happens:** Buyer wires earnest money to the escrow holder (title company, escrow company, or attorney's trust account depending on state). The funds are held in trust until closing or deal termination.

**What can go wrong:**
- Buyer misses the deposit deadline, putting the contract in default.
- Funds wired to the wrong account due to wire fraud (a significant, ongoing problem in real estate transactions).

**Key decisions:**
- Wire fraud protection: verify wire instructions by calling the escrow company directly using a phone number obtained from a source other than the email containing wiring instructions. Wire fraud in real estate closings causes significant annual losses. Funds wired to a fraudulent account are rarely recoverable.

**If the deal falls apart:**
Return vs. forfeiture turns on contingency status — see README.md, earnest money section.

---

## Stage 3: Inspection period

**Typical duration:** 7–14 days from acceptance (varies by contract and market).

**What happens:** Buyer engages a licensed home inspector (and optionally, specialists — structural engineer, radon, sewer scope, roof, HVAC, etc.) to assess the property's condition. Buyer reviews inspection reports and decides: proceed as-is, request repairs or a price reduction, or exit.

**What can go wrong:**
- Inspector identifies significant defects (foundation issues, water intrusion, electrical, roof condition) that affect value or habitability.
- Buyer and seller cannot agree on repair credits or price adjustments.
- Buyer fails to complete inspection before the deadline, losing the contingency by default.

**Key decisions:**
- Proceed as-is: buyer accepts the condition and moves forward.
- Request repairs or credit: seller may agree, counter, or refuse. If refused, buyer must decide whether to exit (still within the contingency window) or waive.
- Exit: buyer delivers written notice of termination within the contingency period. Earnest money is returned.

**Inspection contingency vs. "as-is":** An "as-is" clause means the seller will not make repairs. It does not prevent the buyer from inspecting — or from exiting during the inspection period.

---

## Stage 4: Financing contingency period

**Typical duration:** 21–45 days from acceptance; often the longest active contingency.

**What happens:** Buyer submits a full loan application (if not already done), provides documentation (income, assets, employment, tax returns), and works through the lender's underwriting process. Lender orders an appraisal. Underwriting issues conditions; buyer satisfies them. Final credit approval and "clear to close" are issued.

**What can go wrong:**
- Buyer's financial situation changes (job loss, new debt, large purchase) and loan is denied.
- Underwriter issues conditions the buyer cannot satisfy (e.g., undisclosed debt, gift fund documentation, employment verification issues).
- Appraisal comes in below the purchase price (triggers the appraisal contingency, below).
- Rate lock expires before closing, requiring a new lock at a different rate.

**Key decisions:**
- If financing falls through within the contingency period, buyer can exit and recover earnest money.
- If the financing contingency has already been waived (common in competitive markets), buyer loses earnest money if financing falls through.
- Buyers should not make significant financial changes (new credit accounts, large purchases, job changes) between offer acceptance and closing. These can trigger underwriting conditions or loan denial.

---

## Stage 5: Appraisal

**Typical duration:** Typically ordered within the first 2 weeks of contract; results arrive within 1–3 weeks of inspection.

**What happens:** Lender orders an appraisal from a licensed appraiser (required for most purchase loans). Appraiser inspects the property and delivers a value opinion based on comparable sales, property condition, and market data. The lender will not lend more than the appraised value.

**Appraisal gap scenarios:**
- **Appraisal = purchase price or higher:** No issue. Financing proceeds on the agreed terms.
- **Appraisal below purchase price (appraisal gap):**
  - Buyer can exit using the appraisal contingency (if still active) and recover earnest money.
  - Buyer and seller can renegotiate the price down to the appraised value.
  - Buyer can cover the gap in cash (pay the difference between the appraised value and the purchase price out of pocket), keeping the loan amount unchanged.
  - Buyer can challenge the appraisal (request reconsideration of value) with evidence of comparable sales the appraiser may have missed.

**Appraisal waivers:** Some loans qualify for appraisal waivers (Fannie Mae's automated collateral evaluation or similar programs) based on property type, loan-to-value ratio, and data availability. When a waiver is granted, the lender accepts the purchase price without a full appraisal. Not available for all properties or all transaction types.

---

## Stage 6: Title search

**Typical duration:** Ordered early in the transaction; typically complete within 2–3 weeks.

**What happens:** A title company or attorney searches the public record — deeds, mortgages, liens, judgments, easements, CC&Rs — to establish a clear chain of title from the last owner to the seller, and to identify any encumbrances that could affect the buyer's ownership.

**Common title problems:**
- Undisclosed liens (contractor liens, tax liens, judgment liens against prior owners).
- Boundary or survey disputes.
- Errors in prior deeds (misspelled names, incorrect legal descriptions).
- Forged or fraudulent prior deeds.
- Unknown heirs or unresolved estate issues in the ownership chain.

**If title is not clear:**
- The seller must resolve encumbrances before closing (typically by paying off liens or obtaining releases).
- If title cannot be cleared, the buyer can exit using the title contingency.

**Title insurance commitment:** The title company issues a commitment to provide title insurance (contingent on clearing any exceptions) before closing. The final title insurance policies (lender's and owner's) are issued at closing.

---

## Stage 7: Clear to close

**Typical duration:** Final underwriting review; typically 1–5 days before the scheduled closing date.

**What happens:** Lender issues final loan approval ("clear to close" or CTC) after all underwriting conditions are satisfied. Closing Disclosure is generated and delivered to the buyer at least 3 business days before closing (required by federal law). Buyer reviews final loan terms, closing costs, and cash-to-close figure.

**What can go wrong:**
- Last-minute condition from underwriter delays CTC.
- Closing Disclosure contains errors (incorrect loan terms, unexpected costs) that require correction and reset the 3-day clock.
- Buyer's final financial verification (employment re-verification, credit re-pull) surfaces a change that triggers new conditions.

**Key decisions:**
- Review the Closing Disclosure carefully. Compare it line-by-line to the Loan Estimate. Flag any unexpected changes before the day of closing.
- Confirm cash-to-close amount and wire transfer instructions through a verified phone call to the title company or closing attorney.

---

## Stage 8: Closing

**Typical duration:** A few hours; usually at the title company, escrow company, or attorney's office.

**What happens:** Buyer and seller (or their authorized representatives) sign all documents. Buyer's funds (down payment plus closing costs minus earnest money already deposited) are wired or delivered by cashier's check. Lender funds the loan. Escrow officer or closing attorney confirms all conditions are met and authorizes recording.

**What is signed at closing:**
- Deed (seller conveys title to buyer).
- Promissory note (buyer's loan obligation to the lender).
- Deed of trust or mortgage (lender's security interest in the property).
- Closing Disclosure acknowledgment.
- Various lender and title disclosures.

**What can go wrong:**
- Wire transfer doesn't arrive on time, delaying closing to the next business day.
- Last-minute document error requires correction and re-signing.
- Seller has not fully vacated the property (if a possession-at-closing contract).

---

## Stage 9: Recording

**Typical duration:** Same day as closing, or within 1 business day.

**What happens:** The deed and deed of trust (or mortgage) are electronically or physically submitted to the county recorder's office. Recording creates the public record of the transfer of ownership. Until recording is complete, the transaction is not legally final.

**Ownership transfers at recording, not at signing.** In some jurisdictions, same-day recording is routine; in others, recording happens the next business day. Buyers do not legally own the property until the deed is recorded, even if they have the keys.

**After recording:**
- Title company or escrow company confirms recording, then disburses funds to the seller and pays off any existing liens.
- Seller receives net proceeds.
- Buyer receives final recorded deed and title insurance policies (typically by mail within a few weeks).
- Keys are released (if not already transferred at signing, depending on local custom and contract terms).

---

## Summary table

| Stage | Typical duration | Buyer's exit right | Earnest money risk |
|---|---|---|---|
| Offer/acceptance | Hours–days | Until signed | None yet |
| Earnest money deposit | 1–3 days | Per contract | Deposited but protected |
| Inspection period | 7–14 days | Until deadline | Protected during period |
| Financing contingency | 21–45 days | Until deadline | Protected during period |
| Appraisal | Within financing window | Until deadline | Protected during period |
| Title search | 2–3 weeks | Until deadline | Protected during period |
| Clear to close | 1–5 days before closing | Contingencies typically removed | At risk |
| Closing | Day of | None remaining | At risk → disbursed |
| Recording | Same day or next business day | N/A | Disbursed |
<!--fold:1bc008@end-->
PORTDOWN_6ABF6A8E

# ── post ──
MARKER=$(awk '/^---$/ { f++; if (f==2) exit; next } f==1 && /^marker:[[:space:]]/ { sub(/^marker:[[:space:]]+/, ""); print; exit }' "$DEST")
[ -z "$MARKER" ] && { echo "seed: archive has no marker — corrupt" >&2; exit 1; }
awk -v m="$MARKER" -v outdir="$TARGET" '
  BEGIN {
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    # the path (fold emits  mode="644"  on executables).
    file_re = "^<!--fold:" m "@file path=\"([^\"]+)\"( mode=\"[0-9]+\")?-->$"
    end_re  = "^<!--fold:" m "@end-->$"
  }
  $0 ~ end_re { if (current) close(current); exit }
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    line = $0
    sub(/^<!--fold:[^@]+@file path="/, "", line); sub(/".*$/, "", line)
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    if (dir != current) system("mkdir -p \"" dir "\"")
    printf "" > current
    next
  }
  current { print >> current }
' "$DEST"
SEED_EXTRACTED=$(find "$TARGET" -type f -not -path "$DEST" 2>/dev/null | wc -l)
if [ "$SEED_EXTRACTED" = "0" ]; then
  echo "seed: archive contained no files — refusing to delete the source" >&2
  echo "  archive preserved at: $DEST" >&2
  exit 1
fi
rm -f "$DEST"

echo "" >&2
echo "✓ seed unpacked → $TARGET ($SEED_EXTRACTED files)" >&2
find "$TARGET" -type f | sort | while IFS= read -r _sf; do
  echo "  ${_sf#${TARGET}/}" >&2
done
echo "" >&2
if [ -f "$TARGET/SKILL.md" ]; then
  echo "This seed contains a skill (SKILL.md). Install it in your agent's skills directory." >&2
  echo "" >&2
fi
echo "Install the seed skill if not already installed:" >&2
echo "  https://seed.show/skill" >&2
echo "" >&2
echo "Publisher prompt:" >&2
sed 's/^/  /' >&2 <<'__SEED_PROMPT_END_AC1F2B__'
You have the US residential real estate transaction context. Read README.md first — the contingency chain structure, earnest money mechanics, and attorney-close vs. escrow-close distinction are load-bearing. Consult workflow.md for the full stage-by-stage timeline (offer through recording) with decision points. Fetch sources.md for current rates, limits, and jurisdiction-specific disclosure requirements; do not state interest rates or conforming loan limits as facts. Ask which stage of the transaction to work through.
__SEED_PROMPT_END_AC1F2B__
exit 0