You’ve picked a house to buy and can’t wait to get moved in.
You’re thinking of how your things will look in this house and picturing living there.
You don’t want to rush this, though. If you want to be satisfied with your purchase, you’ll need to take steps to protect yourself.
According to one study, the biggest regret of 36% of home buyers is unexpected repairs and maintenance. You can avoid this problem by getting a home inspection.
Now, don’t confuse a home inspection vs appraisal. These aren’t the same, and you should understand the differences.
Here are some details to help you understand this more.
The Basics of a Home Appraisal
Unless you’re paying cash for a house, you probably cannot purchase a home without getting a home appraisal. Why? Because the lender issuing your home mortgage requires this step.
Lenders need appraisals for several reasons:
- The assessment tells the lender the current value of the home
- The lender bases the loan amount and decision on the appraisal
- This process protects the lender
Your lender will not approve the loan if the house value is substantially lower than the amount you agreed to pay. It’s important to know this because the appraisal can affect the deal you’re trying to complete.
A house appraiser’s primary responsibility is to determine how much a house is worth right now. The appraiser cares only about the value today.
Appraisers use several techniques to complete this job, and one method involves comps.
A comp is a comparable home that a seller recently sold. Appraisers compare the homes that sold with their prices to your home to help determine your home’s current value.
A house appraiser also factors in specific qualities about your home, including its condition, upgrades, and location. An appraiser may spend around an hour at the home to learn as much as possible about it.
Afterward, the appraiser will return to his or her office to begin working on the appraisal report. When complete, he or she will send it to the real estate agent and bank.
The Basics of a Home Inspection
A home inspection serves a different purpose and role than an appraisal. Real estate inspections are standard with home sales. While there are times people choose not to get them, most people want them.
Some mortgage loan programs require buyers to get home inspections, but this is not the case with all loan programs. You should get a home inspection, whether it’s mandatory or not.
Some sellers choose to get pre-listing home inspections. If the seller of the house you’re buying had this completed, you can ask to see the report. However, you should still order a home inspection to be safe.
Here are several things to understand about home inspections:
The purpose of a home inspection is to protect you when buying a house. When you write the offer for the home, you can include a home inspection contingency. This contingency gives you a way out of buying the house if it fails the inspection.
Additionally, the purpose of a home inspection is to give you confidence knowing that you are buying a quality home.
The Information It Provides
A home inspection doesn’t dig deep into every part of the house, but it covers all the essential parts. The inspector may spend several hours at a property working off a checklist.
In the end, you will know the overall condition of the home. The report will reveal any problems with parts of the house. It will help you determine if you need further inspections for any systems or components of the property.
You will have a solid idea of the home’s condition before you go through with the purchase, and this is one of the reasons you should always get a home inspection.
You might not know that you can be present during the home inspection, and you should consider being there. You can learn a lot by talking to the inspector as he or she completes the job.
How You Can Use It to Negotiate
One significant benefit of a home inspection is that you can use it to negotiate. You can ask the seller to pay for the repairs if you find out about a costly repair the home needs. If you prefer fixing it yourself, you can ask the seller to lower the price.
Home Inspection vs Appraisal: Which Is More Important?
Now that you understand the differences between appraisals and home inspections, you’ll probably realize that both are equally important when buying a home.
Each service serves a different role in the home-buying process, and each tells you something different about the house you are buying.
While appraisals are always necessary when lenders are involved, you should view home inspections as necessary, too.
Consider what would happen if you did not choose a home inspection. You may move into the house and find major issues with it shortly afterward. Would you be happy if this happened?
You can avoid surprise issues by hiring a home inspection company when buying a house.
How to Find the Right Home Inspection Company
As you can see, there are some significant differences between a home inspection vs appraisal, yet both are crucial when buying a home.
While you may have the option of skipping a home inspection, you should think twice before opting not to get one. A home inspection is vital when purchasing a property.
If you would like to learn more about the home inspections we offer, contact us today. We can provide you with the information you need about home inspections when buying a house.
You can also order a home inspection by filling out this form. We look forward to hearing from you soon!