What's the Difference Between an Appraisal and a Home Inspection?
One of our most common questions! Here is our best response:
If you’re planning to buy a home, an appraisal is an important step in the process. It’s a professional evaluation of the market value regarding the home you are wanting to buy. In most cases, an appraisal is ordered by the lender to confirm or verify the value of the home prior to lending a buyer money for the purchase. It’s also a different step in the process from a home inspection, which assesses the condition of the home before you finalize the transaction. Here’s the breakdown of each one and why they’re both important when buying a home.
The National Association of Realtors (NAR) explains:
“A home purchase is typically the largest investment someone will make. Protect yourself by getting your investment appraised! An appraiser will observe the property, analyze the data, and report their findings to their client. For the typical home purchase transaction, the lender usually orders the appraisal to assist in the lender’s decision to provide funds for a mortgage.”
When you apply for a mortgage, an unbiased appraisal (which is required by the lender) 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’re going the mortgage route, 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 where low inventory is driving an increase in bidding wars, which can push home prices up. When sellers are in a strong position like this, they may believe they can set whatever price they want for their house 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’s ever any confusion or discrepancy between the appraisal and the sale price, your real estate professional will help you navigate any additional negotiations in the buying process.
Here’s the key difference between an appraisal and an inspection. MSN explains:
“In simplest terms, a home appraisal determines the value of a home, while a home inspection determines the condition of a home.”
The home inspection is a way to determine the current state, safety, and condition of the home before you finalize the sale. If anything is questionable in the inspection process – like the age of the roof, the state of the HVAC system, or just about anything else – you as a buyer have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. Your realtor is typically a key part of this process.
The appraisal and the inspection are critical steps when buying a home, and you don’t need to manage them by yourself. Reach out to a local real estate professional today so you have the expert guidance you need to navigate through the entire homebuying process.
~Real Advantage Partners RE/MAX Precision
home for sale in norwalk iowa
homes for sale in norwalk iowa
house for sale in norwalk iowa
condos for sale in norwalk iowa
condominiums for sale in norwalk iowa
Buy real estate in norwalk iowa
Sell real estate in norwalk iowa
buy a home in norwalk iowa
buy a house in norwalk iowa
buy a condo
buy a condominium
sell my condo
sell my condominium
buy a lot
sell a lot
buy land in norwalk iowa
list my home in norwalk iowa
list my house
list my condominium
list my condo
local realtor in norwalk iowa
realtor near me
hire a realtor
real estate broker
real estate agency in norwalk iowa
real estate agent in norwalk iowa
Post a Comment