Escrow inspections & appraisals
Once you and the seller have both signed, you have what the forms here call mutual acceptance, and a set of deadlines starts running.
The agreement and your earnest money
In most deals here the contract is written on Northwest MLS forms. Soon after mutual acceptance you deliver your earnest money deposit, which is held by the escrow company or by a brokerage, whichever the contract names, and credited toward your purchase at closing.
Put everything in writing. Anything agreed out loud, including counteroffers and changes along the way, becomes an addendum that both sides sign. We draft those with you and make sure you have copies. Keep to the schedule, too. The contract sets a deadline for each stage, and missing one can put you in breach or cost you a right you had. We keep the calendar and tell you what is coming up.
Escrow and title
In Washington, closings are usually handled by an escrow company, often one connected to a title company, rather than by attorneys. Escrow is a neutral third party that holds the money and documents and follows the contract.
The title company researches the recorded history of the property and sends out a preliminary title report. It shows the liens that have to be cleared by closing and the things that stay with the property afterward, such as easements, covenants, restrictions on building or parking, and now and then an encroachment. Read it, and ask us about anything you do not recognize.
Escrow will also ask how you want to hold title. The choices have legal, estate and tax consequences, so ask an attorney or CPA before you answer.
Inspections
Most offers here include an inspection contingency, which gives you a set number of days to inspect the property and decide what to do. You hire a licensed home inspector, and you can bring in specialists for the roof, the heating system or the structure. On older Bellingham houses a sewer scope is usually money well spent, and out in the county the well and septic get looked at too. If you are buying commercial property, your lender will usually want an environmental assessment of the site. We can recommend inspectors for all of it, and there is more in our guide to home inspections.
After that it usually goes one of three ways. You are satisfied and the contingency comes off. Or you ask the seller for repairs, a credit or a lower price, and we negotiate. Or the news is bad enough that you walk away inside the inspection period, which in most deals means you get your earnest money back.
Appraisal and your loan
Stay in close touch with your lender and answer their requests for documents quickly. If the purchase depends on financing, the lender will order an appraisal through a third party. A licensed appraiser looks at size, condition and recent comparable sales (and income, for an investment property) so the lender knows the property supports the loan.
If the appraisal comes in under your price you can renegotiate, bring more cash, or in some cases cancel, depending on how the financing contingency was written. A couple of weeks before closing, check with your lender that everything is on track.
Condos and associations
If the property is in a condominium or a homeowners association, you will receive the association’s documents to review. For condos that includes a resale certificate covering the budget, the dues, the rules and any special assessments on the way. Ask for them as soon as you have a signed agreement, and read them for things like rental caps or pet rules. Board approval of a buyer is uncommon around here. If it does apply, get the application and any fee in early, fill it out completely, and book the interview right away.
Insurance
Your lender will require a homeowner’s policy before closing, and how much coverage depends on the lender and the property. Get quotes early and shop around, because premiums vary a lot. Questions about coverage, deductibles and discounts belong with an insurance agent, and we can point you to good ones.
The last step is closing and moving in.