Inspections, Appraisals, and Due Diligence

Initial Agreement and Deposit

Once both parties agree to terms and sign all documents, either a title company or an attorney serves as the escrow agent. You'll put down your earnest money deposit, which is held by the neutral escrow agent until closing.

The escrow agent's role is to research the property's full history, ensure the title is clear of encumbrances by closing, hold and distribute funds, and coordinate the contingencies in the purchase agreement.

A few practical tips for managing the agreement and closing process:

• Keep written records of everything — verbal agreements, counter-offers, addendums. Your agent can help draft and document along the way.
• Stay on top of the schedule. Both parties have a timeline for completing each stage of the contract. Missing a deadline can put your earnest money or the deal itself at risk.

Property Inspections

As part of the contingencies in your purchase agreement, you'll schedule a licensed property inspector to evaluate the home within the agreed timeframe. The inspector determines the condition of the property and identifies any problems requiring attention.

Depending on the property, you may want multiple specialized inspectors:

• General home inspector for overall condition
• Roof inspector for older homes or properties with potential roof issues
• HVAC, plumbing, or electrical specialists for specific concerns
• Pool inspector if the property has a pool
• WDO (wood-destroying organism) inspector where required by lenders or local conditions

For commercial properties, you may also need environmental audits or soil tests as required by the lender.

If inspection findings reveal issues not specified in the original purchase agreement, you typically have options: renegotiate the price, request repairs from the seller, request a closing credit, or — if findings are severe enough — walk away from the deal under the inspection contingency.

Once you're satisfied with the inspections and any negotiated terms, the inspection contingency is removed and the deal moves forward.

Appraisals and Lending

If your purchase agreement is conditional on financing, your lender will require a home appraisal by a third-party licensed appraiser. The appraiser determines whether the property's value supports the purchase price and loan amount.

Appraisers consider building costs, square footage, comparable sales, condition, and operating income (for investment properties). If the appraisal comes in at or above purchase price, the financing typically moves forward. If it comes in below purchase price, the parties may need to renegotiate, you may need to bring additional cash to closing, or the deal may be restructured.

Stay in close contact with your lender during this period. New documents are often requested, deadlines need tracking, and underwriting questions need timely responses. Double-check with your lender two weeks before closing to confirm the loan will close on schedule.

How to Hold Title

There are several ways to hold title (ownership) of a property — sole ownership, joint tenancy, tenants in common, trust ownership, LLC ownership, and others. Each method has different implications for ownership transfer, financing, taxation, and asset protection.

We recommend speaking with an attorney or tax advisor about the best way to hold title for your specific situation. We're happy to connect you with trusted Market attorneys and tax advisors.

Association Approval

Some Market properties — particularly condos and HOA communities — require association approval before purchase can close. If your property is in an association, request all rules, regulations, and necessary documents from the seller early.

The purchase agreement should include a timeframe for submitting paperwork and completing any required association approval steps. Once approved, your closing agent receives the original approval letter to be recorded with the deed during closing.

Property Insurance

Most lenders require property insurance as a condition of closing. The type depends on how you'll use the property:

• Homeowners insurance if you'll live in the property
• Landlord insurance if you'll rent the property as an investment
• Vacation home or second home insurance if it's a part-time residence

Basic property insurance covers fire, theft, and certain weather events. In [Market] specifically, additional coverage for windstorm, flood, and other weather-related risks may be needed depending on location. Talk to your insurance agent about coverage that matches your property and intended use.