What’s the Difference Between a Home Inspection and an Appraisal?
If you’re planning to buy a home, an inspection is an important step in the process. It assesses the condition of the home before you finalize the transaction. An appraisal is a professional evaluation of the market value of the home you’d like to buy. In most cases, an appraisal is ordered by the lender to confirm or verify the value of the home prior to lending money for the purchase. Here’s the breakdown of each one and why they are both important when buying a home.
Home Inspection
The home inspection is a way to determine the curent state, safety, and condition of the home before you finalize the sale. You have the option to discuss and negotiate any issues or repairs with the seller before the transaction is final. I will help you through this part of the process.
Home Appraisal
A home purchase is typically the largest investment someone will make. Protect yourself by getting your investment appraised. When you apply for a mortgage, an unbiased appraisal is the best way to confirm the value of the home based on the sale price. Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn’t loan you more than what the home is worth.
This is especially critical in today’s sellers’ market. Low inventory is driving an increase in bidding wars which can push home prices upward. When sellers are in a strong position like this, they tend to believe they can set whatever price they want under the assumption that competing buyers will be willing to pay more.
However, the lender will only allow the buyer to borrow based on the value of the home. This is what helps keep home prices in check. If there is any confusion or discrepancy between the appraisal and the sale price, I will help you navigate any additional negotiations in the buying process.
Bottom Line
The inspection and the appraisal are critical steps when buying a home. You don’t need to manage them by yourself. Let’s connect today so you have the proper guidance you need to navigate the entire homebuying process.
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