12 Weeks to Homeownership – Week 10
Appraisals, Inspections and Conditions
Ok! Week Ten! It’s the home stretch!
This week, we should have all of the inspections and the appraisal done. There may be contingencies called out in those reports that need to be completed.
If they are claiming “good to go”, however, you are on your way to the finish line.
However, if anything is called out in the inspections, they’re usually the responsibility of the sellers unless previously agreed upon.
Now, at this point, the process may be at the mercy of the sellers getting those contingencies done. This may or may not cause delays.
Your lender and your realtor will work furiously to ensure these contingencies are getting removed and the process continues to move forward.
It’s important that the appraisal came in at the contract price or above.
Now, if it comes in low, you can get out of the contract and get your earnest money back or you could bring the difference in funds to closing. Your bank’s not going to lend you more than the home is worth, which is all based on that appraisal report.
This is rare as most realtors have enough experience and comparables to support your offer and then will guide you to make sure you aren’t offering more than the house will appraise at.
You’ve paid for these inspections and the appraisal, so they are your property. You should get a copy and review them fully with your agent or lender. You can have your agent address anything you feel uncomfortable with by going back to the seller.
In some situations, the sellers offer credits or a reduced price to accommodate repairs if the repairs don’t hold up the transaction.
For example, if the appraisal calls out for roof life of 5 years before replacement is necessary, but you thought you’d be good for 15 years, that shouldn’t cause the bank to decline your loan. Although, you may want to ask for a reduced price to offset the additional cost you will incure.
Use the experience and skills of your realtor and your lender here. They can walk you through these reports and advise you where necessary.
If you are sent disclosures to sign, make sure you sign and return them within the 72-hour window. That keeps the lines of communication open at all times.
If all is well, you’re almost home! On to week eleven!
In the meantime, our Folsom mortgage lender team is here to answer any questions you may have! Don’t hesitate to give us a call at (916) 985-3200.