Inspections and Appraisals
Most buyers will have the property inspected by a licensed property inspector within the contract’s agreed upon time frame. Some buyers will have several different inspectors inspect the property, if they wish to obtain professional opinions from inspectors who specialize in specific areas (eg. roof, HVAC, structure). 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. This is done via a third party 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 Closing Agent.
Either a title company or an attorney will be selected as the closing agent, whose job is to examine and insure clear title to real estate. After researching the complete recorded history of your property, they will certify that 1) your title is free and clear of encumbrances (eg. mortgages, leases, restrictions or 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 before a contract becomes legally binding. 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.
Before completing the purchase of your property, the buyer goes over every aspect of the property, as provided for by purchase agreements and any applicable addendums. 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 each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the closing; or
2. The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price).
How do you respond objectively and fairly to the buyer when a renegotiation is requested and still act in your best interest? This is when a professional listing agent can make a real difference in the outcome of the transaction. Having dealt with all types of property sales in the past, we guarantee our expertise can help in any negotiation and we offer total commitment to every customer, no matter what the situation.
Loan Approval and Appraisal.
We suggest that you accept an offer from a buyer who has a lender’s pre-approval, approval letter, or written loan commitment, which are all reasonably good guarantees of loan approval. Expect an appraiser from the lender’s company to review your property and verify that the sales price is appropriate.