The process of buying a new home can be stressful, to say the least. There are plenty of boxes to tick and red tape to wade through, besides the actual stress of picking out your next home.
Unfortunately, all of your time and energy can easily and quickly be wasted if you don’t do your due diligence before signing on the dotted line. Not every property is all it seems. Horror stories of unwitting buyers investing in properties with all kinds of issues lurk in the back of our minds.
Thus, a sensible buyer should get a property fully checked out, and a good seller would also make sure everything is in order before putting their home on the market. This means a home inspection. Or do we mean home appraisal?
Home inspections and home appraisals are terms that are sometimes used interchangeably, but these are two very different procedures. So, what does it really mean to get a home appraised and/or inspected? And how will it benefit you? Let’s find out.
Inspection vs Appraisal: What’s the Difference?
Simply put, a home inspection focuses on the condition of your home. A home appraisal assesses the value of your home. One can certainly affect the other, but at the end of the day, they are very different procedures.
Both procedures should be carried out by licensed professionals. They also both dive deep into the condition and value of your home. It’s a good idea for a seller to get their home checked out before putting it on the market, and a buyer would certainly want to investigate their prospective new property before buying.
What is a Home Inspection?
A home inspection is carried out to determine if there are any issues with the home before a buyer makes the big leap. While this is definitely an important part of the buying process, an inspection won’t necessarily affect the property’s value as drastically as an appraisal can. Of course, this might depend on what issues the inspection flags up.
A home inspection takes roughly around three to four hours, and the inspector will be physically checking some elements. While there are some variations, a home inspector will check the basics of a home including:
Roof quality
Plumbing
Appliances
Foundation
Mold/Mildew/Damp
Drainage
Depending on the type of property you’re looking at, an inspector may investigate more. Your real estate agent might even recommend a good home inspector, which is why you might want to use local agents. During my interview with Kimo Quance, a local real estate agent in San Diego, states that, “A clear understanding of the mindset of home buyers and sellers, and a thorough understanding of the regional marketplace is of the utmost importance. And we try to make this process as seamless as possible by referring where we can for home inspectors and similar services.”
It’s also worth your while mentioning any issues or concerns you may have before your inspector does their work. This is because some issues may be missed since a home inspector might not cover every single possible issue. If you have concerns about the roof, bring it up. If you are worried about the insulation of the windows, mention this.
At the end of the inspection, you’ll get a written report on what the inspector has found. If there are more serious concerns, such as lead paint or pests, the inspector might recommend another, more specialized checkup.
Why Should You Get a Home Inspection?
A property might look good on the outside, but there could be hidden issues. For example, there might be serious plumbing issues that will take a lot of time and money to fix. Closing a contract without an inspection could leave an unwitting buyer with costly problems that were there before they bought the home but are now their sole responsibility.
You might feel that disclosure laws mean that a seller has to tell you about any issues. That’s true, although laws vary from state to state. However, there’s always the possibility that the seller genuinely doesn’t know about the issues, or that the problems haven’t been fixed correctly.
What is a Home Appraisal?
An appraisal focuses on the value of the property as a whole, rather than its condition. A licensed appraiser evaluates your home and estimates its value.
To begin with, the appraiser goes through your home, lightly inspecting the inside. Since this inspection is designed to work out the property’s value, not assess the strength of its plumbing, the condition of your house doesn’t weigh as heavily as with a home inspection.
The appraiser also considers the location, finishes, and surroundings. Then they’ll look into other properties sold in the area, similar to yours. They collect as much relevant information as possible, to give your property the fairest price. Finally, you’ll receive a report on the appraiser’s findings.
Why Should You Get a Home Appraisal?
If you’re borrowing money to buy your home - as many do - the lender might insist on an appraisal. If that’s the case, you need the appraisal to be accurate and not too low. A low appraisal can endanger your prospective loan.
Some local real estate agents strive to help with this part of the process as much as they can.
How Will You Benefit?
Buying a new home can be stressful - and exciting. The temptation could be to rush into things and miss out on ticking important boxes. However, there are plenty of benefits to consider for both appraisals and inspections:
An appraisal could secure you a loan to buy your home.
Home inspections can save you from expensive bills further down the line.
Both appraisers and inspectors are qualified professionals and are impartial third parties.
Inspections and appraisals could give you an opportunity to haggle. If you feel like you’re overpaying and an appraisal or inspection flags an issue, you might have the leverage to get a better price.
All in all, it’s better to be safe than sorry. The hope is that your inspection and appraisal comes back just fine, and you land your dream home with minimal bumps in the road. If not, at least, you didn’t waste your time or money. These processes further allow you to find and settle into your new home with peace of mind and without fear of having to put tons of money into your home right off the bat.
