Escrow Inspections and Appraisals

Inspections and Appraisals
Most buyers will have the property inspected by a licensed property inspector within the time-frame that was agreed upon in the effective contract to purchase. Some buyers will have several different inspectors, with specialties in certain areas of inspection such as roof, HVAC, etc. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution via a third party. This is done so that the lending institution can confirm their investment in your property is accurate.

The Closing Agent
Either a title company or an attorney will be selected as a closing agent. The closing agent will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.

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, the buyer reviews every aspect of the property, as provided for by purchase agreements and any applicable addendums, including:

  • Obtaining financing and insurance
  • Reviewing all pertinent documents, such as preliminary title reports and disclosure documents
  • Inspecting the property with a wide range of inspections such as roof, termite/pest, chimney and fireplace, property boundary survey, well, septic, pool/spa, arborist, mold, lead paint, and others.

Depending on the outcome of these inspections, one of two things may happen:

1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the closing; or,
2. The buyer, after reviewing the property and the papers, 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? A professional 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 what their situation is.

Loan Approval and Appraisal
We suggest that you accept buyers who have a lender’s pre-approval, approval letter, or written loan commitment, which is a better guarantee of loan approval than a 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.