PRELIMINARY TITLE REPORT
The title company is also working during this time, investigating public records on the home you are purchasing. They will send out a Preliminary Title Report to all parties outlining all the information they have on the property, including who currently owns the property; any back taxes or liens that may be due; any easements or encroachments on the property; the existence of Covenants, Conditions and Restrictions (CC&Rs); etc.
If you are getting a loan, the mortgage company might require an appraisal. This is where our earlier negotiations become important. If a home appraises below or above the agreed upon sales price, further negotiations may be necessary. An appraisal is performed by a third-party professional appraiser who determines the current market value of the home. An appraisal takes into consideration recent sales of like homes, adding or subtracting value based on square footage, lot size, features, etc. There is a lot of information that goes into an appraisal, but the final number will ultimately determine whether the bank is willing to loan the offered sales price amount to the borrower. If there is a difference in value, sometimes (but not always) the parties will choose to split the difference and amend the sales agreement.
Finally, let's take a look at what it takes to Close the deal...