Are you buying a home but you're not sure which services you need to do so? When in the process of purchasing a home, these two phrases will be thrown around quite a bit: home inspection services and home appraisal services. Though home inspections come in handy when buying a home, there isn't anything that states you need to have one in order to purchase and most lenders don't require this to obtain financing. Appraisals, on the other hand, are required by most lenders to receive a loan.
Appraisals can be important for both the buyer and the lender. An appraisal determines the worth of a property, which can prevent the buyer from paying more than the property is worth. They can also protect the lender in the same sense, as lenders do not want to give more money to a borrower than the property is worth. Appraisals are conducted by a licensed professional but this person cannot have any relationship with the buyer, seller, or even the lender. The appraisal is an out-of-pocket expense that is paid for by the buyer.
Appraisers look for a number of different things to determine the value of a property which include the following:
- Safety hazards
- Land area
- Number of bedrooms and bathrooms
- Energy efficiency
- Type of basement
- Curb appeal
Though an inspection is similar to an appraisal, it's done for a different reason. While appraisals determine the value of a property, home inspections determine the condition of a property. An inspector isn't required to purchase or sell property. Either party is able to hire an inspector. Sellers are able to hire someone for an inspection or pre-listing inspection to find or give them a better understanding of any issues their home may have. The buyers can also hire an inspector prior to closing on the sale of a home for the same reason.
A few of the main things the inspector will check for are the quality and condition of the following:
- Heat and air
- Fire safety
Inspectors won't look for any small issues like chipped paint or door dings. An inspection will give the buyer the full picture of what they are walking into. This also gives the buyer the opportunity to request that the seller fix any big issues before closing on the property or even renegotiating an offer.
Inspections and appraisals, though very similar, are used for very different aspects of the home buying process. They are both very important steps in the process, even if an inspection is not required. It's always better to be safe than sorry.
For more information, contact a home inspection service.