Escrow Inspections and Appraisals
The majority of home buyers opt for a home inspection by a licensed professional. It’s also very common for homebuyers to have other inspections, such as a four-point inspection for insurance purposes, and pest inspection. It’s also not unusual for buyers to have specialists look at components and systems (such as the roof, foundation, septic system, plumbing, electrical wiring, and HVAC).
Furthermore, if the buyer is financing the purchase (which is typically the case), the lender will conduct a home appraisal to ensure the market value supports the agreed purchase price. A licensed home appraiser will analyze local market data and compare it to your property to determine its value. This valuation is what the lender uses to determine if the loan is reasonable and/or it’s level of risk. Keep in mind, the initial appraisal can be challenged and another appraisal conducted to support the agreed purchase price.
Every real estate purchase contract contains contingencies. These are clauses that include conditions that must be met with specifications before the contract is considered to be legally binding. One common buyer contingency is the transaction is contingent on the property passing a home inspection. If the inspection reveals material defects (problems which devalue the property and/or present health and/or safety issues), this gives the buyer the right to walk away with the earnest money deposit.
The buyer has the legal right to fully inspect the property and to request seller concessions. For instance, a home inspection might reveal the roof needs to be replaced in a few years or the water heater is about to fail. In such instances, the buyer generally requests the seller to make one or more concessions (usually lowering the selling price).
Financing and Insurance
The buyer is subject to the requirements of the lender, which can impact the outcome of the transaction. Additionally, the buyer must typically obtain insurance for the lender to give final approval to the mortgage