nearby houses, recent sales, and neighborhood growth and potential for growth, among other factors. Mortgage lenders use this information to ensure the amount you borrow is supported by the home’s value. There is always a risk of a low appraisal, though, in which case the lender won’t go through with the transaction at a price based on a higher presumed value. The seller may or may not adjust the sale price accordingly. Appraisal value is not a binding figure, as the seller and buyer together determine the sale price in the end, after negotiations.
Step 7: Ask for Title Search and Insurance
Title insurance protects real estate owners and lenders against loss or damages that might result from preexisting liens, encumbrances, or defects in the title. Each title insurance policy is subject to specific terms, conditions, and exclusions. Title insurance works a bit differently from other types. Automobile and homeowner’s insurance protect against potential future events and are paid for with monthly or annual premiums. A title insurance policy insures against past events for a one-time premium paid at the closing of the escrow. Title defects include another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements, and other items that are specified in the insurance policy.
Step 8: Be Present at a Walkthrough
Many buyers don’t bother with this part of the closing process, or don’t assume it’s important. Don’t make this mistake. A final
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