Escrow Inspections and Appraisals
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In most purchases you will likely want and need to have a licensed property inspector inspect the property. Normally this is done once the seller accepts your offer, within the time frame that was agreed upon in your purchase and sale agreement. In some cases, when a property is anticipated to receive multiple offers, you may want to have your inspection done prior to writing your offer. This is called a “pre-inspection” and is done ahead of the offer to allow you to write a “clean” offer without an inspection contingency.
You may elect to have different inspectors inspect the property especially if recommended by the general inspector. These may include professional opinions from inspectors who specialize in specific areas (roof, or furnace/HVAC for example). In Seattle, we often also recommend a sewer inspection be completed to be certain that the sewer is not compromised by tree roots or cracks or offsets. This can help avoid costly repairs down the road.
Depending on the outcome of these inspections, one of three things may happen. You may be satisfied with the outcome of the inspection(s) and remove our inspection contingency, you may find deficiencies significant enough to request a renegotiation of the terms of contract by either requesting the seller to make repairs or a renegotiation of the purchase price. In rare cases and inspection may result in you terminating a purchase agreement if the issues uncovered cannot be addressed appropriately to make you comfortable moving forward with a purchase of the property.
Appraisal and Lending
If you are obtaining a loan for the property it is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. 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 a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc.
If the property that you are purchasing is conditional upon an association approval, request the rules, regulations, and other important documents from the seller as soon as you have an effective agreement to purchase. Make sure that the application documents and processing fees are submitted to the appropriate person at the association by the required time.
Escrow/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 (e.g. mortgages, leases, restrictions, liens) by the date of closing; and 2) all new encumbrances are duly included in the title.