Inspections & Appraisals

The Process

Most buyers will hire a licensed inspector to evaluate the property within the agreed timeframe. Some may also bring in specialists for specific areas like roofing, plumbing, or HVAC.

If the buyer is financing the purchase, a licensed appraiser will assess the property to confirm its value meets the lender’s requirements.

The Closing Agent

Once both parties have agreed to the contract and signed all necessary documents, a title company or attorney will act as the escrow, or closing agent, and you will submit your deposit. The escrow agent is a neutral third party responsible for holding, receiving, and distributing all funds related to the transaction until closing. They will also review the full history of the property to ensure the title is clear of any encumbrances and that any new ones are properly recorded. Before closing can take place and ownership is transferred, all contingencies outlined in the Purchase Agreement must be satisfied.

How to Hold Title

There are several ways to hold title, or ownership, of a property, each with different implications for transfer, financing, collateralization, and taxes. We recommend consulting with an attorney or tax advisor to understand the pros and cons of each option and determine what’s best for your situation. We’re happy to connect you with trusted professionals in the area.

Inspections

As part of the contingencies in the Purchase Agreement, you will schedule a licensed property inspection within the agreed timeframe. Inspectors will evaluate the condition of the home and identify any potential issues. You may also choose to hire specialized inspectors (such as for roofing or plumbing). For commercial properties, lenders may require additional evaluations like environmental audits or soil testing. If inspections uncover issues not previously disclosed, you may request to renegotiate the contract terms, often the purchase price. Once you are satisfied with the results and terms, the contingencies can be removed.

Appraisals and Lending

Maintain regular communication with your lender so you’re aware of any additional documentation needed for loan approval. If your Purchase Agreement is contingent on financing, the lender will require a third-party appraisal to confirm the property’s value. Appraisers assess value based on factors such as construction costs, square footage, and income potential. It’s a good idea to check in with your lender about two weeks before closing to ensure everything is on track.

Association Approval

Some properties require approval from a homeowners association before purchase. If applicable, request all rules, regulations, and required documents from the seller. The Purchase Agreement will outline the timeframe for submitting paperwork or scheduling any necessary interviews or approvals. Once approved, your closing agent will obtain the official approval letter to be recorded with the deed.

Property Insurance

Standard property insurance protects against damages from events like fire, theft, and certain weather conditions such as wind or hail. While not always required by state law, most lenders will require coverage before closing. Depending on your plans, you’ll need either homeowners insurance (for a primary residence) or landlord insurance (for rental or investment properties).