Those buying real property often think that the process will be faster than it actually is. They may also experience sticker shock when they look at their settlement statement and see all of the costs that they have to cover.
There are many expenses that pass to the buyer in a residential real estate transaction, including the costs for multiple professionals who will need to physically visit the property. What three professionals often play an important role in a residential real estate transaction?
1. An inspector
Home buyers and the agents representing them may not be able to locate all of the possible issues with the property themselves. They are at particularly high risk of overlooking latent or hidden defects. Inspections are often a necessary part of the home-buying process, particularly if someone needs a mortgage to finance the purchase.
2. An appraiser
The amount that someone will pay for a home and how much a mortgage company will finance depend on the actual fair market value of the property. An appraiser will look at the condition of the property and the sale price for comparable properties nearby that have sold in recent months to determine the current value of the home to protect lenders and buyers from overextending themselves.
3. A surveyor
Surveys may be necessary prior to closing if there are questions about the boundaries of a property or if the property derives much of its value from acreage. Surveyors establish where a property starts and ends and can mark those boundaries to help limit incursions by and conflict with neighbors.
Those making cash purchases can often bypass those expenses, but they do so at their own risk. Understanding why buyers have to pay for certain professional services may help better prepare people for a real estate closing.