Inspections, Appraisal and Closing in Texas
An accepted offer is a big milestone, but there's still work between contract and keys. Here's what to expect.
Use Your Option Period Well
Your option period is short, so schedule inspections right away. Within it you can inspect, gather repair bids, negotiate, or terminate and generally get your earnest money back. Once it ends, that right to walk away for any reason is gone, so watch the deadline closely. (Option fee basics are in Touring Homes and Making an Offer.)
Texas home inspectors are licensed by TREC and report on a standard TREC form. Ask about add-ons such as a wood-destroying insect inspection, a sewer line camera scope or a pool inspection, and try to attend the end so the inspector can walk you through the findings.
Inspection Checklist
- Foundation. North Texas clay soils swell when wet and shrink when dry, which can move a slab. Watch for diagonal cracks above doors and windows, sticking doors, sloping floors and stair-step cracks in brick. If concerns come up, consider a structural engineer.
- Roof. Age, hail damage, missing or worn shingles, flashing and signs of leaks.
- HVAC. Age, cooling performance, condensate drain lines and ductwork.
- Plumbing. Leaks, water pressure, drains, pipe materials and the main shutoff.
- Electrical. The panel, GFCI and AFCI protection, smoke alarms and amateur wiring.
- Drainage. Grading that slopes away from the house, gutters, downspouts and standing water.
- Attic. Insulation, ventilation, roof decking and signs of pests or past leaks.
- Water heater. Age, venting, the relief valve and the drain pan.
Negotiating Repairs
No home is perfect, so focus on hazards, major systems and costly defects rather than cosmetic issues. You can ask the seller to make repairs, lower the price or give you a credit toward closing costs (your lender may limit credits). Put whatever you agree to in writing on a TREC amendment before the option period ends.
The Appraisal
If you're financing, your lender orders an appraisal to confirm the home's value supports the loan. If it comes in below the contract price, your options -- depending on your loan and contract -- may include:
- Asking the seller to lower the price
- Paying the difference in cash, or splitting it with the seller
- Asking the lender to reconsider the value if relevant sales were missed
- Terminating, if your contract and addenda give you that right
Title Commitment, Title Insurance and Survey
The title company searches public records and issues a title commitment showing the current owner, liens, easements and what must be resolved before closing. The contract gives you time to review it and object to problems. An owner's title policy protects you against covered title defects for as long as you own the home, and in Texas title insurance premium rates are set by the Texas Department of Insurance.
For the survey, a seller may provide an existing one with a T-47 Residential Real Property Affidavit stating nothing has changed; if it isn't accepted, a new survey may be needed. Review it for easements, encroachments and fence lines.
Final Walk-Through and Closing
Shortly before closing, walk the home to confirm its condition, that agreed repairs are done (ask for receipts) and that nothing that should stay has been removed.
Your lender must send your Closing Disclosure at least three business days before closing; compare it with your Loan Estimate. Texas closings typically happen at a title company, where you sign your loan documents and the seller signs the deed. The sale is complete once the loan funds and the title company disburses the money, and possession transfers as your contract states.
Protect Yourself from Wire Fraud
Criminals send convincing emails posing as title companies, lenders or agents, with "updated" wiring instructions. Before you wire money, call the title company at a number you've verified yourself -- never one from the email. Changed instructions are a red flag.
This is general information, not legal or lending advice. Confirm details with your lender, title company or a real estate attorney.
Stay on Track to Closing
I'll track every deadline and coordinate with your lender, inspector and title company. Contact Tarus with questions, and once you have keys, read Moving In.