Home Inspections And Appraisals: What They Are And Why You Need Them
What They Are And Why You Need Them
When it comes to buying a new home, home inspections and appraisals are two of the most important steps buyers need to complete before signing on the dotted line. These steps give buyers valuable information about what they’re buying before they buy, and allows them a peek into the future to see what their home may be worth when they’re ready to sell. So what’s the difference between an inspection and an appraisal, and why are they vital in your home buying process?
A home inspection can be done at various points of the home-buying process, and the purpose is to inform the buyer of any defects with the home. Inspectors will look carefully at the entire property and report the findings to the buy, who can then ask the seller to make repairs or adjust the price. Home inspections are equally as important when buying a condo.
A home inspection should include:
The land: They’ll check for standing water, the condition of the trees and bushes, sidewalks, pathways and any extra structures on the property like sheds and retaining walls.
The structure: Inspectors will make sure the foundation of the house is solid, the doors and windows are secure, and the roof isn’t leaking or needing replacement soon. This also includes exterior issues such as paint, cracking or decaying wood, dents, holes, or other damages to the outside of the home.
Interior: They’ll check for faulty or stained ceilings, mold, insulation, heating and cooling vents, etc. This includes inspecting the kitchen for safe electrical outlets, cabinet doors that work properly, and sinks that aren’t leaking. An inspection of the bathroom will check for toilets that flush, sink and tubs that drain, and water pressure and heat levels.
Plumbing and electrical: Inspectors will check for exposed wires, faulty light switches and outlets, as well as plumbing issues throughout the home.
Inspectors go through a lengthy and detailed checklist to give a fair and accurate report of the status of the home so that buyers know exactly what they’re getting into before they buy. Some people choose to forgo the home inspection process to save a few bucks, but most of the time end up regretting it and this is never recommended. Spending $300-500 (depending on the size of the home) to know about the current condition of the house is a small price to pay and could mean the difference between buying a home with expensive underlying issues or walking away.
Having a home appraised means getting an unbiased quote about what the home is worth based on local comparative properties, the current market, and the status of the home. Appraisals are done based on features and structures that are a permanent part of the house and not based on furniture or style and décor of the home. The appraisal is based on the size and condition of the home, the location, the age, square footage, and number of bedrooms and bathrooms.
While home inspections are usually important to buyers, appraisals may be important to both buyers and sellers because it helps determine the asking price for the property. For the seller, the goal is to achieve a high appraisal rate in order to get the most for the property. For sellers looking to improve their home’s appraised value, there are a few inexpensive things that can be done. Things that may affect the appraised value of the home can include:
- Persistent smells/odors
- Water-stained walls
- Broken windows
- Leaky faucets
- Overgrown yard
There are also things that affect the value of your home that you don’t have any control over, such as school districts, neighborhood conditions, community crime rates, low-demand neighbors, etc.
Getting an appraisal done is not only beneficial for the seller, but valuable for the buyer as well. Lenders require a recent home appraisal before they’ll approve you for a loan and want to ensure the home’s value matches the loan amount.
Home inspections and home appraisals are vital steps in any real estate transaction, and should be done through a reputable, licensed professional with experience in the industry. These steps will help both the buyers and the sellers proceed in the real estate purchase process with the same set of facts.