Most buyers will have the property inspected by a licensed property inspector within the time frame that was agreed upon in the purchase agreement. Some buyers will have several different inspectors inspect the property. This is usually the responsibility of the buyer to pay for the inspections. 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 your 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.
Escrow
Escrow is a neutral party who processes the transaction. They are usually chosen by the seller’s side. They hold the buyer’s initial deposit. They examine details of the transaction for precision and everything that is needed to close the transaction.
Title
A research process is done by the title company to certify your property is free and clear of encumbrances. The title company is chosen by the seller’s side.
Contingencies
A contingency is a condition that must be met before a contract becomes legally binding. For instance, a buyer will usually include a contingency stating that their contract is binding only when there is a satisfactory home inspection report from a qualified inspector.
Before completing his or her purchase of your property, the buyer goes over every aspect of the property, as provided for by the purchase agreement and any applicable addendums. These include:
- Obtaining financing and insurance
- Reviewing all pertinent documents, such as preliminary title reports and disclosure documents
- Inspecting the property. The buyer has the right to determine the condition of your property by subjecting it to a wide range of inspections, such as roof, 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 two things may happen:
- Either each milestone is successful and the contingencies will be removed, bringing you one step closer to the closing; or
- The buyer, after reviewing property and reports, requests a renegotiation of the terms of contract in a document called Request For Repairs
It is common for the buyer to make requests and they should be reasonable. This is when a professional listing agent can make a real difference in the outcome of the transaction. Having dealt with various property sales in the past, my expertise and total commitment most always has a collaborative outcome. We will respond objectively and fairly to the buyer when renegotiating their requests.
Loan Approval and Appraisal
I request that buyers are pre-approve from a qualified lender if they are acquiring a loan. I often ask them to be cross qualified with a lender that I trust so we know that they are solid to qualify for a loan. Expect an appraiser from the lender’s company to review your property and verify that the sales price is appropriate.