Inspections & Appraisals

The Closing Process, Step by Step

Initial Agreement and Deposit

A purchase agreement is a legally binding arrangement between the buyer and the seller. To protect your interests and keep the process on track:

• Keep written records of everything — including verbal agreements, counter-offers, and addendums. We assist in drafting all written documentation and provide copies for each party.
• Stay on schedule. Both parties will be given a defined timeline for completing each stage of the closing process.

The Closing Agent

Once both parties have signed the contract, either a title company or a licensed attorney will serve as the escrow or closing agent, and your deposit will be placed into escrow. The escrow agent is a neutral third party responsible for holding and distributing all transaction funds through to the closing date. They will conduct a thorough title search to ensure the property is free of encumbrances and that any new encumbrances are correctly recorded. All contingencies outlined in the Purchase Agreement must be satisfied before escrow can close and ownership can officially transfer.

How to Hold Title

There are several ways to hold title — or legal ownership — of a property. Each method carries different implications for ownership transfer, financing, and taxation. We strongly recommend consulting with a qualified attorney or tax advisor to determine the best option for your specific situation. We are happy to connect you with trusted professionals in the area.

Property Inspections

As part of the agreed contingencies, a licensed property inspector will evaluate the home within the timeframe established in the Purchase Agreement. Inspectors assess the overall condition of the property and identify any existing or potential issues. You may choose to hire specialized inspectors for areas such as roofing or plumbing. For commercial properties, an environmental audit or soil test may also be required by the lending institution.

If inspections reveal issues not previously disclosed, you have the right to request a renegotiation of the purchase terms — typically the price. Once you are satisfied with the inspection findings and the agreed terms, the contingencies will be formally removed.

Appraisals and Lending

Stay in close contact with your lender throughout this stage. If the Purchase Agreement is contingent upon financing, your lender will require a property appraisal by a licensed, independent appraiser. Appraisers evaluate value based on building costs, square footage, operating income, comparable sales, and other relevant factors. We recommend checking in with your lender at least two weeks before closing to confirm that loan approval will be completed on time.

Association Approval

Some properties require approval from a homeowners or property association prior to purchase. If this applies to your transaction, request all relevant rules, regulations, and required documents from the seller early in the process. Once your application is approved, the closing agent will obtain the original approval letter to be recorded with the deed in the county record books at closing.

Property Insurance

Basic property insurance protects you against damages caused by fire, theft, and certain weather events. While not always legally required by the state, most mortgage lenders will require coverage as a condition of the loan. Depending on your intended use of the property:

• If you plan to live in the home, you will need homeowners insurance.
• If you plan to rent the property as an investment, landlord insurance will be required.