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OTHER PARTIES TO AN ESCROW TRANSACTION
CHICAGO TITLE CALIFORNIA BUYER & SELLER GUIDE
In addition to the buyer, seller, lender and real estate agent(s), several other parties may provide their services. For example: appraisal, home warranty, home inspection, termite/ pest inspection and disclosure report.
Appraisal
If the buyer is securing a new loan for the purchase, an appraisal will be required by the lender. An appraiser will:
• Research the subject property as to year built, bedrooms, bath, lot size, and square footage.
• Compare data of recent sales in the subject’s neighborhood, typically within one mile radius. The appraiser usually locates at least three (and preferably more) similar homes that have sold within the past six months. These homes are considered the “comparable properties” or “comps” for short.
• Field inspection is conducted in two parts: (1) the inspection of the subject property, and (2) the exterior inspection of the comparable properties.
The subject property inspection includes taking photos of the front and rear of the home (that may include portions of the yard) and photos of the street scene. The appraiser also makes an interior inspection for features and conditions which may detract from or add to the value of the home. A floor plan of the home is drawn and included while doing the inspection.
Home Warranty
Home warranties offer advantage to both the buyer and seller. This policy protects the buyer by paying for certain repairs and costs of major mechanical systems and major appliances in the home such as heating and air conditioning. There are a variety of plans available.
Benefits of Home Warranty Coverage to the Seller
• Home may sell faster and at a higher price
• Optional coverage during the listing period
• Protection from legal disputes that occur after the sale increases the marketability of the home
Benefits of Home Warranty Coverage to the Buyer
• Warranty coverage for major systems and built-in appliances
• Protects cash flow
• Puts a complete network of qualified service technicians at the Buyer’s service
• Low deductible
Most home warranty plans can be paid for at the close of escrow. A copy of the invoice is presented to the escrow company and it becomes part
of the seller’s closing costs. FNF offers Home Warranty coverage at www.HomeWarranty.com or (800) 862-6837
Home Inspections
A home inspection is another component of
the escrow process. It is a physical examination to identify material defects in the systems, structure and components of a building, such as foundations, basements and under-floor areas, exteriors, roof coverings, attic areas and roof framing, plumbing, electrical systems, heating and cooling systems, fireplaces and chimneys, and building exteriors.
How the Seller Should Prepare for a Home Inspection
The seller should have the property fully accessible, including elimination of stored objects that may prevent the inspector from accessing key components of the home. Areas of special concern are attics, crawlspaces, electric panels, closets, garages, gates/yard, furnaces and water heaters. All utilities should be on with functioning pilots lit.
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