Inspections & Appraisals

The Process

Understanding the steps involved in a real estate transaction can help make the home-buying experience smoother and more predictable. While every transaction is unique, most purchases follow a similar process from contract to closing.

Initial Agreement and Deposit

Once a purchase agreement is signed by both the buyer and seller, it becomes a legally binding contract, subject to any applicable contingencies and state laws. It is important to keep copies of all offers, counteroffers, amendments, and related documents throughout the transaction.

Following the deadlines outlined in the purchase agreement can help ensure inspections, financing, title work, and other requirements are completed on time, reducing the risk of delays before closing.

The Closing Agent

A title company, settlement company, or real estate attorney may serve as the closing or escrow agent, depending on local practices and state requirements. The closing agent helps coordinate the transaction, manages funds held in escrow, and works to ensure the property's title can be transferred according to the terms of the agreement.

Before closing can occur, all contractual requirements and contingencies outlined in the purchase agreement generally must be satisfied, waived, or otherwise resolved.

How to Hold Title

There are multiple ways to take ownership of real estate, and the appropriate method can depend on factors such as marital status, estate planning goals, liability considerations, and tax implications.

Because ownership structures can have legal and financial consequences, buyers should consult with a qualified attorney, accountant, or tax professional before making a decision. Professional guidance can help ensure the chosen ownership structure aligns with individual circumstances and long-term objectives.

Inspections

A professional property inspection is an important step in the home-buying process. Buyers should schedule inspections within the timeframe specified in the purchase agreement to evaluate the property's condition and identify any potential concerns.

Depending on the property type and inspection findings, additional evaluations by specialists may be recommended, such as roofing, plumbing, electrical, structural, environmental, or pest inspections. Commercial properties may also require environmental assessments, engineering reports, or other due diligence reviews.

If inspection results reveal unexpected issues, buyers may have opportunities to negotiate repairs, request credits, or revisit contract terms, subject to the purchase agreement.

Appraisals and Lending

If financing is involved, maintaining regular communication with your lender can help keep the loan process on schedule. Lenders may request updated financial information, documentation, or verification during underwriting.

Most mortgage lenders require an appraisal performed by a licensed appraiser to estimate the property's market value. The appraisal helps the lender assess the property in relation to the proposed loan amount.

Buyers should work closely with their lender to monitor financing progress and address any outstanding conditions well before the scheduled closing date.

Association Approval

Certain properties may be subject to homeowners associations (HOAs), condominium associations, cooperatives, or other community associations. Buyers should carefully review association documents, rules, regulations, fees, and restrictions before completing the purchase.

If association approval is required, it is important to meet all application requirements and deadlines specified in the purchase agreement. Approval procedures and documentation requirements vary by community and location.

Property Insurance

Property insurance is typically required by mortgage lenders before closing. The type of coverage needed depends on how the property will be used.

Homeowners purchasing a primary residence generally obtain homeowners insurance, while investors may require landlord or rental property insurance. Insurance policies can help protect against certain covered risks, although coverage varies by provider, policy type, location, and specific terms.

Reviewing coverage options with a licensed insurance professional can help ensure you have appropriate protection for your property and circumstances.