It might seem as though once a purchase and sale agreement has been signed that the buying process is complete. Not only is it not over yet, but some of the most complex aspects of a real estate transaction now begin. A series of inspections and checks are typically required to satisfy buyers and lenders. Peachtree Fine Properties can help buyers complete the transaction process by assisting with the many requirements found in a typical sale agreement. We also help the buyer prepare for closing, that is, finalizing the sale.
A purchase and sale agreement sets a purchase price for the home and a series of terms and conditions as follows:
Due Diligence Period
An offer to buy a home can include a “due diligence period” clause that allows a buyer to have the option to purchase the home. During the due diligence period, a buyer can perform inspections and review any issues necessary to determine if they should continue with the purchase of the home. If the buyer decides not to purchase the home, a unilateral notice of withdrawal should be completed by the buyer and received by the seller prior to the end of the due diligence period. If the buyer wants to move forward with the purchase of the home and wants the seller to make repairs, an amendment to request repairs should be completed and agreed in writing between the buyer and seller prior to the end of the due diligence period.
Types of Inspections
A number of inspections are common in residential real estate transactions. They include:
• home inspection
• structural inspection (which may also include the foundation, roof, boiler room, furnace, heating, plumbing, appliances, etc.)
• termite inspection
• radon test
• septic inspection and septic letter
• water test
• well test
• sprinkler system
• roof inspection
• HVAC inspection
• property boundary survey
• preclose walkthrough
Home inspections give you a professional assessment of a home’s condition. With such a major purchase as a home, an inspection gives you peace of mind in knowing whether there are any deficiencies that need to be dealt with now or in the future. This is an opportunity to examine the property’s mechanics and structure, ask questions and learn far more about the property than is possible with an informal walk-through. Inspections for a single-family home often require two or three hours, and buyers should attend.
Structural inspections are particularly important. During these examinations, an inspector comes to the property to determine if there are material or physical defects and whether expensive repairs and replacements are likely to be required in the next few years.
Finding an Inspector
Peachtree Fine Properties can advise you on which types of inspections you need and where to find a licensed inspector. You can also look in the yellow pages or online for home inspection associations and home inspectors. Be sure to shop around and find an impartial inspector.
Do a Title Search
After making an offer, you need to do a title search on the property you wish to buy. Your closing attorney can do this for you. These records are important because they provide proof that the owner has valid, marketable and insurable title to the property they are selling. Equally important, such records enable buyers to provide proof of ownership when they sell the property. Title insurance is still necessary because even though the history of property ownership has been checked, it’s possible that the records contain errors, unrecorded claims or flaws in the review itself. Title insurance is paid at closing.
Finalize Your Financing
Complete and forward all required forms and documents to your lender as soon as possible. It will be necessary to validate that you are properly approved for the specific purchase of the property using the specific type of financing with a lender commitment letter submitted to the seller at the end of the financing contingency period.
Purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid. Coverage includes “lenders” policies, which protect buyers up to the mortgage value of the property, and “owners” coverage, which protects owners up to the purchase price, i.e., protects both the mortgage amount and the value of the down payment.
Homeowners’ insurance provides fire, theft and liability coverage on the home and personal property. Homeowners’ insurance policies are required by lenders.
Generally required in high-risk, flood-prone areas, this insurance is issued by the Federal Government and provides coverage for both property and contents. Your lender will know what coverage you require.
Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.
Final Walkthrough Inspection
Before you close on your home, do a final walkthrough to ensure everything is in the condition specified in the sale agreement and that any repairs that were agreed have been made.
Buying a home is a major investment. Inspections provide valuable professional assessments that allow the buyer to make an informed decision on whether or not their investment has any significant defects.