What Can Go Wrong During Escrow?
Whether you’re thinking about buying your first home or selling a home, the term “escrow” will become very familiar. By definition an escrow can be a deed or deposit fund that is used by one person for making a delivery to another person upon the completion of an event or condition. While going through the legalities of purchasing, selling, lending money, and borrowing money everyone needs the assurance that all the instructions in the transactional process are carried out and that none of the funds are delivered until everything has been finalized by all parties. In the mean time, an escrow holder is responsible for withholding the related funds and documentation until the transaction process is settled.
To have an escrow process smoothly, everyone in the escrow process has to work together diligently and to make sure that all documentations are in place. Unfortunately, sometimes not all things will follow through during the escrow process and the process has to be stopped. Some of the things that may go wrong during escrow are generally during the home inspection process.
The home inspection process consists of:
- Inspection of house damages: When there are major damages to a house, such as big ceiling cracks, big holes and dents in the walls, etc. – this calls for a big negotiation between the seller and the buyer and his agent. If the agent and buyer believe that due to the damages the price of the house is too overvalued this can end the escrow process if negotiations don’t go well the the price does not get adjusted.
- Inspection of drinking water: Water is an every day necessity, and many home buyers and lenders will require that the drinking water be tested for any sort of contamination. Depending on the location of the house (if it runs on a private well, there is no municipality that tests the water) or when the plumbing pipes were done (can contain lead) the water may not be suitable to drink.
- Inspection for pests: no matter where you live, all homes are prone to have some form of pests whether it be ants, termites, rat, fungal, etc. If you are trying to sell your home check to make sure that the state you live in requires you to give the buyer and lender a pest free letter from the pest control company.
- Inspection for radon: Although there is no law that prohibits the selling of a house that has radon (which is a orderless and colorless gas that is radioactive from the breakdown of uranium in the soil causing lung cancer) the U.S. Surgeon General urges that home buyers should be aware of this and inspect the house.
- Inspection for lead-based paint: Since the late 1970’s lead-based paint is no longer used, however for those who are buying homes built prior to 1978, it is recommended that the home be inspected – since lead causes cancer.
Buying a house or selling a house is not always an easy process. There are numerous factors that add up to a final sale of a house – so if you’re looking to either buy or sell a house consider the different ways that you can make the process easier and faster for the person on the other side of the party.
