Inspections & Appraisals

The Process

Initial Agreement and Deposit

A binding purchase agreement is a legal arrangement between the buyer and the seller that sets the foundation for the entire transaction. Keeping this process clean and well-documented is essential.

• Keep written records of everything, including verbal agreements, counter-offers, and addendums. We will assist in drafting all written documentation and ensure each party receives copies.
• Keep up with the schedule. Both you and the seller will work within an agreed-upon timeline to complete each stage of the closing process.

The Closing Agent

Once both parties have signed the contract, either a title company or an attorney will serve 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 tied to your transaction until the closing date. They will thoroughly research the property's history to confirm that the title is free of encumbrances and that any new encumbrances are properly recorded. Before escrow can close and ownership can officially transfer, all contingencies outlined in the Purchase Agreement must be fully satisfied.

How to Hold Title

There are several ways to hold title, or legal ownership, of a property. Each method carries different implications for ownership transfer, financing, collateralization, and taxation. We strongly recommend consulting with an attorney or tax advisor to evaluate the pros and cons of each approach and determine the best option for your situation. We are happy to connect you with trusted attorneys and tax advisors in the area.

As part of the contingencies in the Purchase Agreement, you will arrange for a licensed property inspector to visit the home within the agreed timeframe. The inspector will assess the condition of the property and flag any issues that require attention. You may also choose to bring in specialized inspectors for specific systems such as the roof or plumbing. If you are purchasing a commercial property, your lender may require an environmental audit or soil test. Should the inspection reveal issues not addressed in the purchase agreement, you have the right to request a renegotiation of the terms, including price. Once you are satisfied with the inspection results and the agreed terms, the contingencies will be formally removed.

Appraisals and Lending

Stay in regular contact with your lender so you are aware of any new documents required to keep your loan approval on track. If the Purchase Agreement is contingent upon financing, your lender will order a home appraisal from a licensed third-party appraiser. The appraiser will verify that the investment value of the property is accurate and well-supported. Appraisers assess value based on a range of factors including building costs, square footage, operating income, and comparable properties. We recommend confirming with your lender approximately two weeks before closing that the loan is on track for timely approval.

Association Approval

Certain properties require approval from a homeowners or property association before the sale can be finalized. If this applies to your transaction, request all governing rules, regulations, and required documents from the seller as early as possible. The Purchase Agreement will establish a timeframe for submitting the necessary paperwork or completing any required appointments for association review. Once approved, your closing agent will request the original approval letter so it can be properly recorded with the deed in the county record books at closing.

Property Insurance

Basic property insurance protects you against damages caused by fire, theft, and certain weather-related events such as wind or hail. While most states do not mandate coverage for property owners, most mortgage lenders do. Depending on how you intend to use the property, you will need to secure either homeowners insurance if you plan to occupy the home, or landlord insurance if you intend to lease it as a rental investment.