If you’re looking at purchasing a new home and you’re getting close to closing, then you’ll likely hear two words used almost interchangeably: “appraisal” and “inspection”. While both have a significant impact on a home’s value, they are quite dissimilar all together and are actually different animals. Here’s what you need to know about home appraisals and inspections.
Appraisal vs. Home Inspection: What’s the Difference
As we’ve already said, both the appraisal and the home inspection of your new house may affect its overall value, but they are each mutually exclusive of one another.
Your home’s appraisal or appraised value is what your lender will use to determine if your mortgage and consequently the amount of money you’re being lent is on par with what the home is worth. Appraisals are always ordered by the lending bank and always use an unbiased, professional appraiser who will give both you and the bank the fair market value of your home.
The other side of the coin is a home inspection. As a buyer, you usually order a home inspection shortly after signing a contract or during your option period. Where an appraiser effectively works for the lender, a home inspector works for the buyer. Home inspections focus primarily on the condition of the home, look at potential problems, and apprises you of those problems (if any) and how they may affect the home in the future.
What’s the Hold-Up?
Both appraisals and inspections are commonplace in the real estate industry, but they can sometimes cause some hiccups to unsuspecting buyers and sellers.
Appraisals can delay proceedings by coming in way above or way below the sales price of the home, therefore, complicating the lending process. From the home inspection side, major problems can hold up your home buying venture in a heartbeat. If an inspector notices any mechanical, foundational, or construction issues during his or her once over of your home, then there will likely be concessions in order on the seller’s side to either repair the problem or compensate you for those repairs.
Early on in the process, inspection problems may not be a huge issue, but late in the game and closer to closing may present some added stresses and depending on the structure of your contract may cancel the deal entirely.
Get the Right Kind of Help
Having a good real estate agent who can help you navigate both the appraisal and the inspection part of buying a home will be a great asset to you and your family moving forward. An agent can help you understand the appraisal process and help you negotiate any problems that may arise with the home inspection.
Additionally, getting help with your mortgage will get you started on the right track to your home buying journey. Get in touch with Tidewater Mortgage Services, Inc. today, fill out our online application, and get pre-qualified in as little as 24 hours. Our loan experts can help you find the right mortgage solution for any new home!