Agent & Price
Inspection and Appraisals
Most buyers will have the property inspected by a licensed property inspector within the timeframe that was agreed upon in the effective contract to purchase. Some buyers will have several different inspectors inspect the property and obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure).
If the agreement is contingent upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution via third party. This is done so that the lending institution can confirm their investment in your property is accurate. A buyer of a commercial property may also have a complete environmental audit performed and/or soil test, if required by the lending institution.
The Escrow Company.
The Purchase Contract specifies the escrow and title company to be used in carrying out certain provision of the contract. The title company’s job is to examine and insure clear title to real estate. After researching the complete recorded history of your property, the title company will provide you with a Preliminary Title report, outlining any and all recorded deeds affecting your title, i.e. easements, Conditions, Covenants & Restrictions (CC&R’s). It will also certify that 1) your title is free and clear of encumbrances (eg. mortgages, leases, or restrictions, liens) by the date of closing; and 2) all new encumbrances are duly included in the title.
A contingency is a condition that must be met if a contract is to be performed. 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 or when the lender formally approves the loan.
Before completing his or her purchase of your property, the buyer goes over every aspect of the property, as provided for by purchase agreements and any applicable addenda. These include:
- Obtaining financing and insurance;
- Reviewing all pertinent documents, such as preliminary title reports and disclosure documents; and
- Inspecting the property. The buyer has the right to determine the condition of your property by subjecting it to a wide range of inspections, such as roof, termite/pest, chimney/fireplace, property boundary survey, well, septic, pool/spa, arborist, mold, lead based paint, HVAC, etc.
Depending on the outcome of these inspections, one of two things may happen:
1. Either the buyer removes the contingencies without any further action, bringing you one step closer to the closing; or
2. The buyer, after reviewing the property and the papers, submits a request for certain repairs to be completed prior to close of escrow OR a credit of reduction in the purchase price in lieu of repairs OR some hybrid of the two. Once a new agreement has been reached, the buyer will release the physical inspection contingency.
How do you respond objectively and fairly to the buyer when a re-negotiation is requested, while acting in your best interests? This is when a professional listing agent can make a real difference in the outcome of the transaction. Having dealt with various complex property transactions over the years, we know how to expertly represent our client’s best interest and guarantee our total commitment to every customer, no matter what their situation is.
Once the buyer has released all their contingencies, including the physical inspection, disclosures, Preliminary Title Report, loan, appraisal, etc., the buyer will move forward with signing their loan documents, wiring in the remainder of their down payment and closing costs and closing escrow.