Inspections & Appraisals

The Buying Process

Purchase Agreement and Earnest Money Deposit

Once you decide to move forward with a property, you and the seller will work toward a purchase agreement that outlines the terms and conditions of the transaction. This agreement serves as the foundation for the purchase process and typically includes important details such as timelines, contingencies, and closing requirements.

To help keep the transaction organized:

• Keep copies of all signed documents and written communications.
• Review deadlines carefully and stay on schedule with any required actions.
• Ask questions if there are any terms or conditions you do not understand.

The Closing Agent

After a purchase agreement has been executed, a closing agent, typically an attorney or title company, depending on local practices, will help coordinate the closing process.

The closing agent may assist with tasks such as:

• Managing escrow funds, when applicable
• Reviewing title records
• Preparing closing documents
• Coordinating with lenders and other parties involved in the transaction
• Facilitating the transfer of ownership at closing

Before closing can occur, any contingencies outlined in the purchase agreement must generally be satisfied or otherwise addressed according to the terms of the contract.

Holding Title

There are several ways ownership of real property can be held, and the appropriate option depends on your individual circumstances and goals.

Because ownership structures can have legal, financial, and tax implications, buyers should consult with qualified legal and tax professionals regarding the option that best suits their needs.

Property Inspections

Inspections are an important part of the due diligence process. Buyers often choose to hire licensed inspectors to evaluate the condition of a property and identify potential concerns before closing.

Depending on the property type and circumstances, additional inspections or evaluations may be recommended, such as:

• Roofing inspections
• Plumbing inspections
• HVAC evaluations
• Pest inspections
• Environmental assessments for certain commercial properties

If inspections identify issues, buyers and sellers may negotiate repairs, credits, or other solutions as permitted by the purchase agreement.

Financing and Appraisals

If financing is involved, your lender may request documentation throughout the loan approval process. Staying in regular contact with your lender can help ensure that all required items are submitted in a timely manner.

Many mortgage programs also require an appraisal performed by a licensed appraiser. The appraisal helps the lender evaluate the property's market value and determine whether it meets lending requirements.

Homeowners Associations

Some properties are subject to homeowners associations (HOAs) or condominium associations. Before purchasing, review any available association documents, rules, regulations, fees, and restrictions to ensure they align with your expectations and needs.

If association approval is required, be sure to understand the application process and any associated deadlines.

Property Insurance

Property insurance helps protect against certain covered losses and is commonly required by mortgage lenders. The type of coverage you need may depend on how the property will be used.

For example:

• Owner-occupants typically obtain homeowners insurance.
• Rental property owners may need landlord or dwelling coverage.

Insurance requirements, coverage options, and costs vary by provider and property, so it's important to consult with a licensed insurance professional to determine the appropriate coverage for your situation.