![]() With a home inspection, that cost also falls on the buyer’s shoulders. Who pays for it: While mortgage lenders require an appraisal, the buyer is usually the one who pays for it. Keep in mind these costs can go much higher, particularly if you have a larger home in a high-priced area. How much it costs: A home inspection costs an average $340, according to data from HomeAdvisor, while an appraisal typically runs $349, the home professionals site reports. ![]() There are some similarities between a home inspection versus an appraisal: Related: Home inspection checklist for buyers How appraisals and inspections overlap This preemptive inspection can identify potential repairs before a buyer requests a credit, giving you the advantage of addressing them with your own contractor. You might also consider completing a home inspection before listing if you’re selling your home. With the appraisal, though, you’re typically not invited. If there’s an inspection contingency in place in the offer, the buyer can decide whether to move forward with the transaction and negotiate or pay for repairs, or walk away.Īs the buyer, you usually have the right to be present for the home inspection. If any issues surface, the buyer now has that information in the inspection report. Are there plumbing issues? Is the roof in need of repairs? Does the fireplace work? Is the electrical wiring safe? Home inspections help uncover any problems with just the condition of the home. For the buyer, an inspection helps identify issues with the property before finalizing the purchase.Īn appraisal considers the surrounding neighborhood, recent market trends, and other factors that influence a home’s value. What’s the difference between a home appraisal versus an inspection? While the lender requires an appraisal, a home inspection is usually a stipulation that comes from the buyer. How appraisals differ from home inspections Generally speaking, appraisals are also required if you want to refinance your mortgage (although there are some types of refinances that don’t need one). For example, if you recently completed a major renovation, such as a kitchen remodel, an appraisal could help you get an idea of how much value you added to the property. In these cases, the buyer can make up the difference with cash, or try to negotiate the price with the seller.Īppraisals aren’t just for home purchases, either. As buyers compete for homes by making above-ask offers, some appraisals have come back lower than expected. Unfortunately, that’s been especially challenging in the current housing market. One of the key functions of an appraisal is verifying that the price the buyer agreed to pay is actually a reasonable offer. That way, if you wind up defaulting on the loan, the lender has reassurance it can sell the property and get its money back. That’s because the lender needs to ensure the home is worth the amount you’re borrowing for it. Your lender will most likely require an appraisal if you’re getting a mortgage. Total square footage (including lot size)Īppraisals also consider comparable homes (comps), which are similar properties in the area that have been recently sold. The appraiser assesses both the outside and inside of the home, and considers a range of factors that can influence its worth, including: It can’t be performed by just anyone a licensed appraiser does the job on behalf of mortgage lenders, real estate agents, homebuyers or homeowners requesting a valuation. A home appraisal is an assessment of a property’s value.
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