Escrow Inspections and Appraisals

The Process, Step-by-Step

The Initial Agreement and Deposit.

An effective agreement is a legal arrangement between a potential buyer and the property’s seller.

Some important tips to keep in mind to streamline the process:

• Keep written records of everything. In the state of Georgia, all real estate agreements including counter-offers and amendments must be in writing to be viable and enforceable. I will assist you in drafting all the paperwork for your purchase and make sure that you have copies of everything.
• Stick to the schedule. Now that you are under contract on your dream home, you and the seller will be given a timeline to mark every stage in the process of closing. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process I will keep you constantly updated, so you will always be prepared for the next step. I will keep track of all deadlines so you can sit back and relax.

The Closing Agent.

Either a title company or an attorney will be selected as a closing agent. The closing agent will hold the deposit in escrow and will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.

Inspections.

Once your offer is accepted by the seller, you will need to have a licensed property inspector inspect the property within the time frame that was agreed upon in purchase agreement. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). I can recommend several different inspectors that I have worked with and trust.

Depending on the outcome of these inspections, one of two things may happen:

1. We will ask the seller to make repairs to the home, providing the home inspection report as a reference, or
2. We will request that the seller either reduce the sales price or contribute additional money toward your closing costs so you can coordinate the necessary repairs after closing.

Appraisal and Lending.

It is imperative that you keep in close communication with your lender (I will also be in regular communication with your loan officer), 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 mortgage company, via a third party. This is done so that the mortgage company 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, condition of the home, and recent sales of comparable properties. When you are within two weeks of closing, we will double check with your lender to be sure the loan will go through smoothly and on time.

Property Insurance.

If you are obtaining a loan, you will be required by your lender to purchase homeowner insurance on the property. The value will depend on the mortgage company and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. You can also save money with these tips.

• Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
• Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Persons over 55 years of age or long-term customers may also be offered discounts. Also, insuring other items, such as your car, boat or motorcycle usually reduces your premium as well.
• Insure your house NOT the land under it. After a disaster, the land is still there. If you do not subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.

I will be happy to recommend experienced knowledgeable insurance agents for every property type.