Path of Homeownership: Open of Escrow. Time For Inspections

Now that your offer has been accepted there are a number of steps that will need to be taken care of until the closing process is complete. So, it is important to give the same amount of attention to the closing process as you did during hunting for your home.

The concept of an Escrow and Title Escrow Company is to operate as an uninterested third party in Real Estate Transactions. Title Companies act as an intermediary between buyers and sellers, or their agents, and ensure that everything in the transaction goes according to the sales contract. This offers protection to all parties involved.

TITLE INSURANCE

Title Insurers operate under the theory of risk elimination or loss caused by defects in title from the past. Title Companies spend a high percentage of their operating income each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. Their technical experts are trained to identify the rights others may have in your property, such as liens, legal actions, disputed interests, rights of way or other encumbrances on your title. When a title search is complete, the title company issues a preliminary report. Before closing your transaction, the title company will proceed to "clear" those encumbrances which you do not wish to assume. Title insurance provides coverage only for title problems which were already in existence at the time the policy was issued.

PRELIMINARY REPORT

The preliminary report illustrates the extent of your ownership rights. This means you will want to review the ownership interest in the property you will be buying as well as any claims, restrictions or interests of other people involving the property.

INSPECTIONS

During the contingency period, your Mother and Daughter Realty Team will schedule any physical inspection specified in the purchase order. The seller has the responsibility to reveal the true condition of the propery on a disclosure statement. This may help you determine the type of inspection you and your Real Estate Agent deem necessary.

STRUCTIONAL PEST CONTROL INSPECTION (TERMITE REPORT)

In addition to actual termite damage, the pest report will indicate any type of wood destroying organisms that may be present including fungi. The termite report is prepared by a state certified inspector as evidence of the existence or absence of wood destroying organisms or pests which were visable and accessible on the date the inspection was made. The inspector looks for signs of activity from other wood destroying organisms such as:

• Dry wood termites
• Carpenter ants
• Carpenter bees
• Wood destroying fungus

Most termite reports classify conditions as Section I or Section II. Section I conditions are those currently causing damage to the property. These conditions generally need to be corrected before a lender will make a loan on a home. Section I repair work is usually paid for by the seller. Section II conditions are those not currently causing damage, but which are likely to, if left unattended.

GEOLOGICAL INSPECTION

A buyer can elect to have a geological inspection performed by a Geotechnical Engineer, who evaluates the soil conditions at the home. This inspection involves not only physically inspecting the property, but also researching past geological activity in the area. You may also elect to go to the city and research the property and its proximity to known fault lines.

HOME INSPECTION

A Home Inspector will go through the house and seek out any potential problems (roof, plumbing, electrical, heating, appliances, water heater, furnace, exterior siding and other visible features of the property. The Home Inspector will issue a detailed report that will have recommendations, often times to consult a specialist for further inspection.

HOME INSPECTION TIPS

• A Home Inspector can uncover problems before you purchase, potentially saving you thousands of dollars down the road. So skipping out on a Home Inspection can effect you in the long run. If your Home Inspector discovers some issues with the house this can be factored in and negotiated with the purchase price
• Schedule your Home Inspection around a time that you can be present. Good Inspectors are passionate about explaining what they see as they go along.
• Have questions ready when selecting a Home Inspector.
  • How much experience does your inspector have?
  • Does the Home Inspector have a license? It is wise to chose a home inspector with a license, so if a problem arises after the sale of your home that you were not aware of, you can argue that, and that the Inspector did not disclose it it you. If the Inspector is bonded and at fault, they may be responsible for paying costs associated with whatever problem came up.
  • Is your inspector a member of a professional Home Inspection Association?
  • How long with the Inspection take and cost?
  • What type of report is provided and how long will it take to receive it? Always insist on a written report from an Inspector. Verbal reports are meaningless in the event of a conflict with a buyer.

OTHER COMMON INSPECTION

• Water Conservation
• Well & Septic
• Seismic
• Hazardous Materials
• Zoning & Building permit compliance
• Contractors Home Inspection
• Chimney Inspection
• Heating & Air Conditioning
• Structural Engineering
• Energy Audit
• Geotechnical
• Roof Inspection
• Pool/Spa Inspection

The seller will want your inspections performed quickly, get approved and move forward with the purchase of the home. Once the buyer has received the inspection reports, it is their responsibility to review it, and approve it or not. If the buyer decides not to approve the inspection reports, it is best to sit down with your Real Estate Agent and negotiate with the sellers on which repairs to perform and who is responsible for paying for the repairs. If the seller and the buyer can not come to an agreement, the buyer can cancel the contract without penalty, as long as time was permitted within your contract. Once all of your inspections have been scheduled and reports reviewed and approved...contingencies are removed!