Escrow inspections & appraisals
The Process, Step-by-Step
The Initial Agreement and Deposit.
An effective purchase agreement is a legal arrangement between a potential purchaser and the property’s seller. Once your offer is accepted, the contract will outline the terms, deadlines, contingencies, and other requirements that must be completed before closing. In Colorado, earnest money may be required and is handled according to the terms of the contract and applicable closing procedures.
Some important tips to keep in mind to streamline the process:
- Keep written records of everything. For the sake of clarity, it is extremely useful to have all agreements, counteroffers, amendments, and other important communications documented in writing. We will assist you with the paperwork involved in your purchase and make sure you understand the documents and deadlines throughout the transaction.
- Stick to the schedule. Once your offer has been accepted, you and the seller will follow a timeline outlining the major stages of the Colorado real estate transaction. Meeting each requirement on time helps keep the process moving smoothly and reduces the risk of unnecessary delays. During the process, Golesh Team will keep you updated so you are prepared for each next step.
The Closing Agent.
A title company or qualified closing professional will typically coordinate the closing process. The closing agent will handle the earnest money according to the contract and work with the parties involved to research the property’s title history. The title process helps identify liens, mortgages, easements, restrictions, encumbrances, and other matters that may affect ownership. Some properties may also be subject to recorded covenants or restrictions that limit activities such as construction, parking, or property use. We will help you understand these important considerations as you move toward closing.
How to Hold Title.
You may wish to consult an attorney or tax advisor regarding the best way to hold title to your Colorado property. Different methods of holding title can have different legal, estate, and tax implications, particularly when the property is sold or ownership changes. Golesh Team can help you understand the real estate considerations while encouraging you to seek qualified legal or tax advice for your specific circumstances.
Inspections.
Once your offer is accepted by the seller, you will generally have an opportunity to have the property inspected within the time frame established in the purchase contract. You may elect to have additional inspections performed by professionals who specialize in specific areas, such as the roof, HVAC, structure, plumbing, electrical systems, sewer, septic, or other components. Commercial property purchases may require additional environmental or property assessments depending on the property, lender, and terms of the transaction. Golesh Team can help you identify qualified inspectors and coordinate the appropriate steps.
Depending on the outcome of these inspections and the applicable contract terms, one of two things may happen:
- Each milestone is successfully completed and the applicable contingencies are satisfied or removed, bringing you one step closer to closing; or
- After reviewing the property and related documents, you may request repairs, concessions, or a renegotiation of certain terms of the contract.
Appraisal and Lending.
It is important to remain in close communication with your lender, who will let you know when additional documents or information are needed to approve your loan and prepare for funding. If your purchase is contingent upon financing, the lender will typically order an appraisal to determine the property’s market value. The appraiser considers factors such as the property’s size, condition, features, location, and recent comparable sales. Depending on the property type, additional factors such as income and operating information may also be considered. When you are within two weeks of closing, check with your lender to confirm that your financing is on track and that all remaining requirements are being completed on time.
Association Approval.
If the property you are purchasing is located within a homeowners association, condominium association, or other community governed by an association, carefully review the applicable rules, regulations, financial documents, and other disclosures as soon as possible after entering into an effective agreement. Make sure any required application documents and processing fees are submitted by the appropriate deadlines. Complete all information accurately and thoroughly to help avoid delays. If an association interview or approval is required, schedule it as soon as possible. Golesh Team will help you stay aware of these requirements and coordinate with the appropriate parties throughout the transaction.
Property Insurance.
If you are obtaining a mortgage, your lender will generally require you to maintain appropriate insurance coverage on the property. Coverage requirements can vary based on the lender, property type, location, and other factors. Shopping around and comparing coverage and premiums may help you find a policy that provides appropriate protection at a competitive cost.
- Consider a higher deductible. Depending on your financial situation, choosing a higher deductible may reduce your insurance premium, although you should make sure the deductible remains affordable if you need to file a claim.
- Ask your insurance agent about discounts. You may qualify for discounts based on certain safety and security features, bundled policies, claims history, or other factors. Ask your insurance professional which discounts may apply to your property.
- Insure the structure appropriately. Work with your insurance professional to determine the appropriate amount of coverage for the home’s replacement cost rather than simply basing coverage on the total purchase price, which may also include the value of the land.
Golesh Team will be happy to help connect you with experienced insurance professionals who can discuss coverage options for your Colorado property.