Escrow inspections & appraisals
Inspections and Appraisals.
Most buyers will have the property inspected by a licensed property inspector within the time frame agreed upon in the effective contract to purchase. Some buyers may hire multiple inspectors to focus on specific areas (e.g., roof, HVAC, structure) if they wish to obtain professional opinions from specialists. If the agreement is conditional upon financing, the property will be appraised by a licensed appraiser to determine its value for the lending institution via a third party. This ensures that the lending institution can confirm their investment in your property is accurate. A buyer of commercial property may also request a complete environmental audit and/or soil test, if required by the lending institution.
The Closing Agent.
Either a title company or an attorney will be selected as the closing agent. Their job is to examine and insure clear title to the real estate. After researching the complete recorded history of your property, the closing agent will certify that:
- Your title is free and clear of encumbrances (e.g., mortgages, leases, restrictions, liens) by the date of closing.
- All new encumbrances are duly included in the title.
Contingencies.
A contingency is a condition that must be met before a contract becomes legally binding. For instance, a buyer will usually include a contingency stating that their contract is binding only when there is a satisfactory home inspection report from a qualified inspector.
Before completing the purchase of your property, the buyer will review every aspect of the property, as outlined in the purchase agreement and any applicable addenda. These include:
- Obtaining financing and insurance
- Reviewing all pertinent documents, such as preliminary title reports and disclosure documents
- Inspecting the property: The buyer has the right to determine the condition of your property by subjecting it to a wide range of inspections, such as roof, termite/pest, chimney/fireplace, property boundary survey, well, septic, pool/spa, arborist, mold, lead-based paint, HVAC, etc.
Depending on the outcome of these inspections, one of two things may happen:
- Each milestone is successfully closed, and the contingencies will be removed, bringing you one step closer to closing.
- The buyer, after reviewing the property and the documents, requests a renegotiation of the terms of the contract (usually the price).
How do you respond objectively and fairly to the buyer when a renegotiation is demanded, while acting in your best interests?
This is when a professional listing agent can make a real difference in the outcome of the transaction. Having dealt with various property sales in the past, we guarantee our expertise and total commitment to every customer, no matter their situation.
Loan Approval and Appraisal.
We recommend that you accept buyers who have a lender’s pre-approval, approval letter, or written loan commitment. This is a better guarantee of loan approval than pre-qualification or no documentation from a lending institution. Expect an appraiser from the lender’s company to review your property and verify that the sales price is appropriate.