The Differences Between An Appraisal and A Home Inspection
So you’ve decided that you are done waiting on the sidelines of this hot real estate market but you don’t know the first thing about the process of buying a home. No worries, we’re here to lend a helping hand! Although there are many things to learn about real estate transactions, one important delineation to learn is the differences between an appraisal and a home inspection.
An appraisal report is a valuation product used to find the value of the real estate. Appraisers use market data such as comparable sales, rent prices, occupancy rates, construction costs and other metrics to determine the value of a specific property. Your lender will be the one to order the appraisal but I'm sure you can guess who will be liable to pay for the appraisal, that’s right, that will be you! The lender should order the appraisal within the first 5 days of you going under contract to make sure that there is nothing holding up the closing date. The appraisal report will be sent to your lender so that the lender can determine if the property is worth the contract price.
The purpose of a home inspection is to determine a property's structural integrity and to give a prospective buyer a solid idea about the issues or damage the property may have before purchasing. The home inspector is typically hired by either the prospective buyer themselves or is a referral from the buyer’s real estate agent. The home inspector will provide the prospective buyer with an inspection report that can then be used to negotiate repairs or concessions with the seller. Now that I think of it, the only thing a home inspection and an appraisal have in common is that you’ll be paying for both!
Now that you know the difference between these important services you should be able to get off the sidelines and into the game! If you’re still hesitating about becoming a homeowner then please feel free to contact us today for more information on the topic. We would love to offer any sort of guidance navigating through these tricky transactions. We love to help out wherever we can!