Now that your offer to purchase a home has been accepted, you are on the clock! Due diligence requirements start, and you generally have limited time to get your mortgage application submitted for preliminary approval, schedule an appraiser if a mortgage is required on the property, and perform a home inspection. A lot is happening in a short time, and time is of the essence. Your real estate agent is usually in position to guide you through the process.
As is common, a home inspection is performed on the property and is usually paid for by the buyer, but this task may be negotiated. As your mortgage application process continues, an appraiser assigned to your case by your lender performs their work by assessing the house and establishing a market value for the property. The appraisal is sent to the mortgage company for use in developing your loan and mortgage documents. Now, if the appraiser sees conditions that jeopardize the use of the house or identifies major defects like possible structural issues or water intrusion, the appraiser may note such finding in the appraisal report triggering concern for the valuation of the house. Also, the home inspector may observe the same conditions in the house. The home inspector may likely have more information regarding the cause of the matter and provide remedies for the conditions.
Alarm bells ring! Stop the application! The mortgage company may need more information about the matter slowing the mortgage application process. But rest easy and don’t worry. Many times, experts are brought in to evaluate conditions and provide practical repairs. Usually, the matter is resolved and the process of buying and selling a house continues. Findings during a home inspection are common and are generally resolved through repair or, many times, monetary negotiation. Communication with the mortgage company is important in establishing repair programs for the house so that the lender can establish proper values in your mortgage application. These conditions happen often in real estate transactions and can be resolved through open communication and a willingness to work together.