Escrow Inspections & Appraisals
ESCROW INSPECTIONS & APPRAISALS
Inspections and Appraisals
Most buyers will have the property inspected by a licensed property inspector within the agreed-upon time frame in the purchase contract. Some buyers may hire multiple inspectors specializing in different areas (e.g., roof, HVAC, structure) for professional opinions. If the agreement is contingent upon financing, the property will be appraised by a licensed appraiser to determine its value for the lending institution. This is to ensure the accuracy of the lending institution's investment in your property. For commercial properties, buyers may also conduct environmental audits and soil tests if required by the lender.
The Closing Agent
A title company or attorney will be chosen as the closing agent, responsible for examining and insuring clear title to the real estate. They will research the complete recorded history of your property to certify that 1) your title is free and clear of encumbrances (e.g., mortgages, leases, restrictions, liens) by the closing date; and 2) all new encumbrances are properly included in the title.
Contingencies
A contingency is a condition that must be met before a contract becomes legally binding. For example, a buyer might include a contingency stating that their contract is binding only when there is a satisfactory home inspection report from a qualified inspector.
Before finalizing the purchase of your property, the buyer will review every aspect of the property, as outlined in the purchase agreements and any applicable addendums. These aspects 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:
Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the closing; or
The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of the contract (usually the price).
When faced with a renegotiation demand from the buyer, it's crucial to respond objectively and fairly while acting in your best interests. A professional listing agent can make a significant difference in the outcome of the transaction. With experience in various property sales, we guarantee our expertise and total commitment to every customer, regardless of their situation.
Loan Approval and Appraisal
We recommend accepting buyers who have a lender's pre-approval, approval letter, or written loan commitment, as these provide a stronger guarantee of loan approval compared to pre-qualification or no documentation from a lending institute. Expect an appraiser from the lender's company to review your property and verify that the sales price is appropriate.
Close of escrow
Closing Day
If you've come this far, it's almost time for congratulations, but not quite yet. Don't forget to tie up these loose ends:
Final Walk-Through Inspection
More of a formality than anything else, the final inspection typically takes place the day before or the day of the closing. The buyer visits the property to verify that everything is in working order, the property is in the same condition as when they last viewed it, and that no extra items have been left behind.
Cancel Home Services and Utilities
We'll provide you with a list of useful numbers for terminating home services and utilities after the closing occurs.
Be Prepared
As we approach the final stages, we're here to help with any unexpected issues that may arise. If there's a breakdown at the property or a delay in the buyer's loan, don't worry. We've dealt with these situations before and know how to manage them efficiently and without stress.
Closing
The closing agent will provide all parties involved with a settlement statement, summarizing the financial transactions of the process. The buyer(s) will sign this statement, followed by you and the closing agent, certifying its accuracy. If you're unable to attend the closing, arrangements can be made depending on the circumstances and notice received. For funds from the transaction, you can choose to have them wired electronically to your financial institution or receive a check at the closing. It's important to arrange for all property keys and any other important information to be available for the new purchaser at the closing.
