Home » Buyers » Escrow Inspections and Appraisals

ESCROW INSPECTIONS AND APPRAISALS

INITIAL AGREEMENT AND DEPOSIT

An effective agreement is a legal arrangement between a potential buyer and the home seller. Make sure to keep written records for the sake of clarity. It will be useful to transcribe verbal agreements, counter offers, and addendums to written documents that are signed by both parties. Your agent will help you draft all this paperwork and make sure you have copies of everything. Try to stick to the schedule outlined in the contract. When your offer is chosen, a timeline is set to mark each stage of the process. Your agent should keep you updated through this process so that you are always prepared for the next step.

THE CLOSING AGENT

A title company or attorney will be selected as a closing agent. They will hold the deposit in escrow while completing research and recording the history of the home. They do this to ensure that a property has a free and clear title for closing. Some properties may have building or parking restrictions or encroachments which might limit the use of that property. It’s always best to know every detail about the home you are potentially buying.

HOW TO HOLD TITLE

You may wish to consult an attorney or tax advisor about the best way to hold title. Each method of holding title can have different legal, estate, and tax implications.

INSPECTIONS

When your offer is accepted, you will need to schedule an inspection on the property with a licensed inspector within the agreed upon timeframe in the contract. You may want to have different inspectors that specialize in specific areas (roof, HVAC, structure). Once an inspection has taken place, either you move one step closer to closing or you may want to review and renegotiate.

APPRAISAL AND LENDING

Keeping close communication with your lender is key. They will let you know when additional documents have been requested to approve your loan application. If your contract is conditional upon financing, the property will be appraised by a licensed appraiser to determine its value for the lender.

ASSOCIATION APPROVAL

Your new home might be conditional upon association or HOA approval. If so, request their rules, regulations, and other important documents once the contract has been accepted. You’ll need to know if there are any processing fees and if the dues are up to date. Sometimes the association requires an interview for approval – be sure to schedule this as soon as possible.

PROPERTY INSURANCE

If you are financing your new home through a loan, you will be required to purchase homeowners’ insurance. It’s always good to do your research and shop around for different rates – it could save you hundreds of dollars a year! A higher deductible, even by just a few hundred dollars, can make a big difference in your premium. Always ask for discounts! Deadbolt locks, smoke detectors, alarm system, storm shutters, impact resistant shingles – there are many things in your new home that might qualify you for a discount.