Escrow Inspections and Appraisals

Escrow

The role of the Escrow Agent is to act as a neutral third party to fulfill the terms of a Real Estate Purchase & Sale Agreement (PSA) and facilitate the successful transfer of ownership from seller to buyer. Below is a general step-by-step description of the process.

Courtesy of Chicago Title & Escrow

What is a Contingency?

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 of their choice. If the accepted contract is subject to a loan, then a financing contingency will also most likely be included in the contract.

Inspections

Most buyers will have the property inspected by a licensed home inspector within the time frame that was agreed upon in the purchase and sale agreement. The job of the inspector is to try to find things wrong with the house. If your home has been meticulously maintained, the inspector will have to search for things that may seem trivial to you. If there is deferred maintenance on the home, the inspection report may find significant defaults in the house. There may also be things that you were unaware of.

Appraisals

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 a third party. This is done so that the lending institution can confirm their investment in your property is accurate.

After all of the contingencies are removed (and repairs are completed if necessary) we are clear to close.