Inspections and Appraisals:
Most buyers will have the property inspected by a licensed property inspector within the time frame that was agreed upon in the executed contract to purchase. Some buyers will have several different inspectors inspect the property if they wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure etc.). 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 via third party. This is done so that the lending institution can confirm their investment in the 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. Their job, in most cases, is too examine and insure title to the real estate involved. After researching the complete recorded history of your property, they will certify that either your title is free and clear of encumbrances (eg. mortgages, leases or restrictions, liens etc.) or they will give notice of any existing encumbrances.
A contingency is a condition that must be met before a contract becomes legally binding or before the close of escrow. For instance, a buyer will usually include a contingency stating that their contract is binding only when there is a satisfactory home inspection performed by a qualified inspector.
Before completing the purchase of a property, the buyer should go over every aspect of the property as provided for by the Purchase Agreement, as well as any applicable Addendums. These include but are not limited to:
- 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 the 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 three things may happen:
1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the closing.
2. The buyer, after reviewing the property and the papers, can in most cases requests a renegotiation of the terms of contract or request repairs.
3. The buyer can terminate the contract.
How do you respond objectively and fairly to the buyer when a renegotiation is demanded, while acting in your best interests? This is one way our professional Listing Agents can make a real difference in the outcome of the transaction. Having dealt with various property sales in the past, we guarantee our expertise and total commitment to every customer, no matter what their situation entails.
We suggest that you accept buyers who have a lender’s pre-approval letter, an approval letter, or written loan commitment. This is a better guarantee of loan approval than a pre-qualification letter or no documentation from a lending institute.