STEP 5: Inspections & Appraisals
Inspections & Appraisals
The majority of buyers will have the property inspected by a licensed property inspector within the agreed-upon timeframe in the purchase agreement. If they want professional opinions from inspectors who specialize in a given area, some buyers will have the property inspected by multiple separate inspectors (eg. foundation, HVAC, roof). If the deal is contingent on financing, the property will be appraised by a licensed appraiser in order to ascertain the value for the lending institution. This is done so that the lending institution can verify the accuracy of their investment in your property. If the lending institution requires it, a buyer of a commercial property may additionally have a comprehensive environmental audit and/or soil test performed.
Closing Agent
The closing agent will be either a title business or an attorney, and their role will be to check and ensure clear title to real estate. They will certify that: after researching your property's entire recorded history,
By the date of closing, your title is free and clear of encumbrances (such as mortgages, leases, restrictions, or liens).
The title has been updated to include all new encumbrances.
Contingencies
A contingency is a requirement that must be fulfilled before a contract is legally binding. A buyer, for example, will almost always include a contingency indicating that their contract is only binding if a satisfactory home inspection report is provided by a qualified inspector.
The buyer inspects every part of your property before completing his or her acquisition, as specified by purchase agreements and any necessary addendums. These are some of them:
Financing and insurance can be difficult to come by.
All relevant documents, such as preliminary title reports and disclosure paperwork, are reviewed.
Inspecting the property. The buyer has the right to conduct a variety of inspections on your property, including roof, termite/pest, chimney/fireplace, property boundary survey, well, septic, pool/spa, arborist, mold, lead based paint, HVAC, and so on.
One of two things could happen depending on the results of these inspections:
Either each milestone is completed successfully, and the contingencies are removed, moving you closer to the closing; or
After inspecting the property and the paperwork, the buyer wants a renegotiate of the contract's conditions (usually the price).
When a renegotiation is needed, how do you respond objectively and fairly to the buyer while working in your best interests? This is where a skilled listing agent can make a significant difference in the transaction's result. We promise our experience and absolute commitment to every customer, no matter what their situation is, because we have worked with a variety of property transactions in the past.
Accepting purchasers with a lender's pre-approved, approval letter, or written loan commitment is a higher guarantee of loan acceptance than pre-qualification or no documents from a lending institution. Expect an appraiser from the lender's firm to look over your home and confirm that the transaction price is reasonable.