Escrow inspections & appraisals
The Initial Agreement and Deposit.
An effective agreement is a legal arrangement between a potential purchaser and the property’s seller.
Some essential tips to keep in mind to streamline the process:
Keep written records of everything. For clarity, it will be beneficial to write down all verbal agreements, including counter-offers and addendums, and to convert them into written agreements to be signed by both parties. We will assist you in drafting all the paperwork for your purchase and ensure you have copies of everything.
Stick to the schedule. Now that you have chosen your offer, you and the seller will be given a timeline to mark every stage in closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. We will keep you constantly updated during the process, so you will always be prepared for the next step.
The Closing Agent.
A title company or an attorney will be selected as closing agents. 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 that limit various activities, such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.
How to Hold Title.
Consider consulting an attorney or tax advisor on the best way to hold the title. Different methods of holding titles have other legal, estate, and tax implications, especially when selling or upon the death of the titleholder.
Inspections.
Once the seller accepts your offer, you will need to have a licensed property inspector inspect the property within the time frame agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property if you want professional opinions from inspectors who specialize in a specific area (e.g., roof, HVAC, structural, environmental). We can recommend several different inspectors.
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 close, or
After reviewing the property and the papers, the buyer requests a renegotiation of the terms of the contract.
Appraisal and Lending.
You must keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. 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 that their investment in your property is accurate. Appraisers are specialists in determining the value of properties based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double-check with your lender to be sure the loan will go through smoothly and on time.
Property Insurance.
If you are obtaining a loan, your lender will require you to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the property’s purchase price. Shopping around for insurance may save hundreds of dollars a year on homeowners insurance. You can also save money with these tips.
Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
We will be happy to recommend experienced, knowledgeable insurance agents for every property type.