title insurance policy is subject to specific terms, conditions, and exclusions. Auto and homeowner’s insurance protect against potential future events and is paid for with monthly or annual premiums. A title insurance policy insures against past events for a one- time premium paid at the close of the escrow. Title defects include another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements, and other items specified in the insurance policy. 7. Conduct a Home Appraisal A home appraisal determines the estimated market value of the soon-to-be-yours property. The appraiser evaluates it based on general condition, geographic location, proximity to objects of interest, compared to nearby houses, recent sales, and neighborhood growth and potential among other factors. Mortgage lenders require an appraisal and use this information to make sure the amount you borrow is supported by the home’s value. There’s always a risk of a low appraisal. In that case, the lender won’t go through with the transaction at that price. If this happens, the seller might adjust the sale price accordingly but also might not. The appraisal value isn’t a binding figure — what the seller sells for and the buyer pays determines the sale price. The situation might be that you negotiated a deal with the seller for a price already lower than initially wanted. This likely is due to the home selling in a buyer’s market and its location in a declining market area. This may slow or disrupt the closing process while further negotiations are conducted. In a seller’s market like in 2021, most homes were offered with the remark, “ No appraisal contingency will be accepted with an offer. If there is an appraisal shortfall, the purchaser agrees to make up the difference.” The appraiser struggled with appraising the homes because prices were increasing almost daily. 8. Set the Time and Date of the Closing The closing date is a negotiable factor during the offer and acceptance phase of a home sale transaction. When making an
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