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The Goal Is Information, Not Perfection
Every home has issues. The question is whether those issues are acceptable, negotiable, or deal-breaking.
The inspection and appraisal phase is where you get the full picture of the home you are buying. No house is perfect, and inspection reports can be overwhelming. This module helps you understand what to expect, how to evaluate findings, and how to navigate the appraisal process so you can make informed decisions without panic.
Home Inspection Expectations
A qualified home inspector will spend two to four hours evaluating the property from roof to foundation. They examine the structure, electrical system, plumbing, HVAC, roof, exterior, insulation, and more. Every inspection report will contain findings because every home has imperfections. The purpose of the inspection is not to find a perfect home. It is to identify safety concerns, major defects, and items that could become expensive problems. I recommend attending the inspection so you can see the findings firsthand and ask the inspector questions in real time.
Inspection Response Options
After reviewing the inspection report, you have several options for how to proceed. The right choice depends on the severity of the findings, the market conditions, and your comfort level with the issues identified.
Request Repairs
Ask the seller to fix specific items before closing. Best for safety issues and major defects that need professional attention. Sellers may push back on cosmetic requests.
Negotiate Credit
Instead of repairs, ask the seller for a credit toward closing costs so you can address the issues yourself after closing. This gives you control over the quality of the work.
Accept As-Is
Move forward without requesting repairs or credits. This may be the right choice if the findings are minor or if the home was priced to reflect its condition.
Terminate
If the inspection reveals deal-breaking issues, you can terminate the contract within your inspection contingency period and receive your earnest money back.
The Appraisal
The appraisal is ordered by your lender to confirm the home is worth what you are paying. An independent appraiser evaluates the property and compares it to recent sales of similar homes in the area. If the appraisal matches or exceeds your purchase price, the process continues smoothly. If the appraisal comes in below your purchase price, you have options: renegotiate the price with the seller, bring additional cash to cover the gap between the appraised value and the purchase price, challenge the appraisal with additional comparable sales data, or walk away using your appraisal contingency. I help you evaluate which option makes the most sense based on the numbers and the situation.
Underwriting Do's and Don'ts
While your loan is in underwriting, the lender is verifying everything about your financial situation. Any changes to your income, debt, or assets during this period can derail your approval. Following these guidelines keeps your loan on track.
Do
- Respond to lender requests within 24 hours
- Provide documents exactly as requested without substitutions
- Maintain your current employment and income
- Keep your bank balances stable and documented
Don't
- Open new credit cards or lines of credit
- Make large deposits without a documented paper trail
- Change jobs, quit, or go from salaried to self-employed
- Co-sign loans for anyone during this period
- Buy furniture, appliances, or a car on credit before closing
Clear to Close
Clear to close is the final approval milestone from your lender. It means underwriting has reviewed and approved everything: your income, credit, assets, the appraisal, the title search, and your insurance. Once you receive clear to close, the title company prepares the final closing documents and schedules your closing appointment. This is the moment when the finish line becomes visible. Between clear to close and closing day, do not make any financial changes. Keep everything exactly as it is until you have signed and received your keys.
YOUR PREFERENCES
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Frequently Asked Questions
We have several options. We can ask the seller to make repairs, negotiate a credit toward closing costs, adjust the purchase price, or in serious cases walk away using your inspection contingency. I help you evaluate the severity of findings and decide on the best path forward.
I strongly recommend it. Attending the inspection gives you a chance to see the home through the eyes of a professional, ask questions in real time, and understand the difference between major concerns and normal wear and tear. Plan to be there for the last hour when the inspector does the walkthrough summary.
A low appraisal means the lender will not finance more than the appraised value. We can negotiate with the seller to lower the price, you can make up the difference in cash, we can challenge the appraisal with additional comparable sales, or you can walk away using your appraisal contingency. I will advise you on the best approach for your situation.
Underwriting typically takes 10 to 14 business days, though it can vary depending on the lender, the complexity of your financial situation, and how quickly you respond to document requests. Delays in providing documents to your lender are the most common cause of underwriting slowdowns.
Clear to close is the final green light from your lender confirming that your loan is fully approved and the closing documents can be prepared. It typically arrives 3 to 7 days before your scheduled closing date. Once you have clear to close, the only remaining steps are the final walk-through and closing day itself.
Questions? (317) 660-5745 or sheldon@mycarmelrealty.com
Questions? (317) 660-5745 or sheldon@mycarmelrealty.com