Facebook
X
Pinterest
Copy Link
Congratulations, your offer has been accepted! Now it’s time to confirm that you got a good house at the right price. What do I mean? Once you are under contract, the next two major hurdles are the home inspection and the appraisal. Let’s look at five key points about the similarities and differences between the two.
Purpose of the Home Inspection
- Home inspections are crucial to assess the condition of the property. They are conducted by a state licensed inspector. He or she will examine the homes structural integrity including the roof, electrical systems, plumbing, HVAC and more.
- The goal of the inspection is to identify any issues, like hidden damage or safety concerns.
- If something is found that was not disclosed by the Seller(s), this can be used as a negotiation tool to either have it repaired by the seller prior to closing or receive a credit to your purchase price.
- The home inspection is scheduled by the Buyer’s Real Estate Agent
- The cost of the Home Inspection is paid upfront by the Buyers.
Role of Home Appraisal
- Appraisals are used to determine the market value of the property.
- Appraisals are part of your loan process and will be ordered by your Lender. Lenders want to make sure they are not lending more than the property is worth.
- Appraisers consider factors like location, size, and condition.
- Another determining factor of value includes recent sales of similar properties. The properties must be of similar size, within a certain radius, and typically have sold within the last six months.
- Like the home inspection, the appraisal is paid for by the Buyers as an upfront cost and can be used in negotiations with the Sellers if the value were to come in lower than the purchase price.
Based on the above, you can now see how the inspection and appraisal play a vital role in the homebuying process. It is crucial that you are working with a knowledgeable Realtor® who can help you navigate the process. Once you are through the Home Inspection and appraisal process, it should be smooth sailing to your closing.
