Inspections & Appraisals

The Process

Initial Agreement and Deposit

A signed and executed agreement is a binding contract between a prospective buyer and the property seller. Here are some key pointers to facilitate the process:

• Maintain detailed written records of all communication, including verbal agreements, counter-offers, and addendums. Our team can aid in drafting these records and provide copies to all involved parties.
• Adhere to the designated timeline. Both you and the seller will be provided with a schedule outlining the deadlines for each phase of the real estate closing process.

The Closing Agent

Once both parties have agreed and signed all documents a title company or attorney will serve as the escrow or closing agent, and you will submit your deposit also known as earnest money. The escrow acts as an impartial third party responsible for holding, receiving, and disbursing all funds related to your transaction until the property's closing date. They will conduct a comprehensive examination, also called a title search, of the property's history to ensure a clear title, free of any encumbrances, and accurately record any new encumbrances by the closing date stated in the contract.. Prior to finalizing the escrow and completing the property purchase, all contingencies outlined in the Purchase Agreement must be fulfilled.

How to Hold Title & Inspections

There are various methods for holding title, each with distinct implications for ownership transfer, collateralization, financing, and taxation. We recommend consulting with a legal or tax professional to weigh the advantages and disadvantages of each method, enabling you to select the most suitable option for your property. We're happy to facilitate connections with reputable attorneys and tax advisors in your area.

As stipulated in the Purchase Agreement's contingencies, you'll arrange for a licensed property inspector to evaluate the home within the agreed timeframe. Inspectors assess the property's condition and identify any issues. You may opt to engage multiple inspectors specializing in specific areas (e.g., roofing or plumbing). For commercial properties, an environmental audit or soil test may be necessary as required by the lending institution. Should inspections reveal undisclosed property issues, you may negotiate contract terms (typically the price). Upon satisfactory inspections and agreement on purchase terms, contingencies will be removed.

Appraisals and Lending

Stay in touch with your lender to ensure timely notification of any additional documents needed to process your loan approval. If the Purchase Agreement hinges on securing financing, the lending institution will mandate a home appraisal conducted by a licensed third-party appraiser. This appraisal serves to verify the property's investment value. Appraisers possess expertise in assessing property worth based on factors such as construction costs, square footage, operating income, and other relevant considerations. Prior to closing, it's advisable to verify loan approval status with your lender at least two weeks in advance.

Property Insurance

Standard property insurance policies provide coverage against various damages to your property, such as fire, theft, and specific weather-related incidents like wind or hail. Although property insurance isn't typically mandated by most states for property owners, it's often a requirement from mortgage lenders. Depending on your property's use, you'll need to procure either homeowners insurance if you intend to reside in the property, or landlord insurance if you plan to rent it out as an investment venture. Additionally, it's important to note that if the property is situated within a flood zone or an area prone to flooding, purchasing flood insurance may be required.