Do YOU know the difference between an inspection and an appraisal?
Each are integral to the successful purchase of your home, but what purposes, exactly, does each serve?
This is the part of the purchasing process where you, as the purchaser, bring a licensed contractor in to the property you wish to purchase and learn about the health and fitness of the property. Think of the inspection like a physical exam you get from your doctor. You may look alright to the casual observer, but to the trained eye of a physician, you may have high cholesterol, high blood pressure and you don’t get enough sleep. Likewise, an inspector will examine the various components of your property and inform you of their overall fitness.
An inspector will examine the major systems a property has: electrical, plumbing, heating and cooling, etc. The inspector will also look at the construction of the property, focusing on the roof, foundation, windows and doors. Inspectors will also examine appliances that are staying with the property.
Inspections, typically, are paid for by the buyer of a property. Real estate agents will have recommendations of inspectors with whom their clients have been pleased. Other inspections a purchaser may wish to consider include; radon, pest, well, septic.
This process is the point at which the bank learns about the financial viability of the property itself. When a home is purchased, and the purchaser uses a mortgage to finance the purchase of the property, the bank wants to know that they are not lending money on a potentially over-valued property. An appraisal is the way a bank determines the fair market value of a property, which (after consider a buyer’s credit score) is one of the most key determinants in the bank’s decision to extend or not extend credit.
Appraisers go to the property you are purchasing to review its general condition and amenities, confirm a few facts about the property, and then search for comparable properties that have sold in the not too distant past. The kinds of properties appraisers look for are as close as possible geographically, not sold more than six months ago, and are similar in size and style to the subject property.
So, in conclusion, inspections and appraisals are two big “pieces” of the home purchase puzzle.
Never hesitate to contact us if you have any questions about inspections, appraisals or anything else related to the purchase or sale of a home!
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