Inspections and Appraisals
Most buyers will have the property inspected by a licensed property inspector within the time frame that was agreed upon in the purchase contract. 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. If you live in Montgomery County, having a Radon test done (with a lab report of the results) before settlement is mandatory. It should be spelled out in the contract as to whether the buyer or seller will have the test done.
The Closing Agent
In Maryland, it is the buyer’s right to choose the closing agent (also referred to as the settlement company or title company). Their job is to examine and insure clear title to your property. After researching the complete recorded history of your property, they will certify that 1) your title is free and clear of encumbrances (eg. mortgages, leases, or restrictions, liens) by the date of closing; and 2) all new encumbrances are duly included in the title.
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 purchase agreements and any applicable addendums. These include:
- Obtaining financing and homeowner insurance;
- Reviewing all pertinent documents, such as preliminary title reports and disclosure documents; and
- Inspecting the property. The buyer has the right to determine the condition of your property by subjecting it to a home inspection.
Depending on the outcome of these inspections, one of two things may happen:
1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the closing; or
2. The buyer may request repairs be made (pursuant to the home inspection), may request a renegotiation of the price is the appraisal falls short of the contract price, etc.
How do you respond objectively and fairly to the buyer when a renegotiation is demanded, while acting in your best interests? This is when a professional listing agent can make a real difference in