The Process

Investing in real estate requires a structured approach to inspections, appraisals, and closing to ensure a smooth transaction. Here’s what you can expect each step of the way.

Initial Agreement and Deposit

Once you’ve reached an agreement with the seller, an effective contract outlines the terms for both parties. Here are a few tips to streamline the process:

• Keep Detailed Records: Document all agreements, counter-offers, and addendums in writing. We’ll assist in drafting and providing copies of all documents.
• Follow the Timeline: Adhering to the agreed-upon timeline is crucial to completing the transaction smoothly. Each step has specific deadlines for the closing contract.

The Role of the Closing Agent

After the agreement, a title company or attorney will act as the escrow, managing all funds for the transaction. The escrow agent conducts a title search to ensure the property is free of encumbrances. Before closing, all contingencies outlined in the Purchase Agreement must be fulfilled.

Understanding Property Title Options

There are various ways to hold title to an investment property, each with implications for ownership transfer, collateralization, financing, and tax considerations. Consulting with a trusted attorney or tax advisor will help you determine the most suitable option. We’re happy to connect you with experienced professionals in the area.

Property Inspections

As part of your Purchase Agreement, arrange for a licensed inspector to assess the property. They will alert you to any issues, and for more specialized concerns, you may want additional inspections (e.g., plumbing or structural). For commercial investments, environmental audits or soil tests might be required by lenders. If inspections reveal issues not covered in the Purchase Agreement, you may negotiate terms or request a price adjustment. Once satisfied, remove contingencies to move forward.

Appraisals and Lending

Stay connected with your lender to ensure timely loan approval. If financing is a contingency, the lender will require a professional appraisal to confirm the property’s value. Appraisers assess value based on factors like operating income, building costs, and comparable sales. Double-check with your lender two weeks before closing to confirm everything is on track.

Association Approval

Certain properties may require approval from a homeowners’ or condo association. Gather all necessary documents and adhere to agreed timelines for approval. Once received, the closing agent will obtain an official copy to record with the deed at closing.

Property Insurance

Secure property insurance to protect your investment against damages such as fire, theft, and certain weather events. Mortgage lenders generally require insurance; choose either homeowner’s or landlord insurance, depending on whether you intend to live in or rent the property.

Final Walk-Through Inspection

Before closing, conduct a final walk-through to ensure all contingencies have been met and the property is in agreed-upon condition. This inspection typically happens the day before or on the day of closing.

Closing the Deal

Once you’re satisfied with the property’s condition, it’s time to finalize the purchase. You, the seller, and the closing agent will sign the settlement agreement detailing the transaction’s financials. After signing loan documents and transferring closing funds (either by certified check or wire), the deed is recorded, officially transferring ownership to you.

Ready to invest? Call us at 803.329.3285 or fill out this form, and one of our agents will guide you through every step of the investment process.