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What’s the Difference between an Appraisal and a Home Inspection?

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 of the home you’d like to buy. In most cases, an appraisal is ordered by the lender to confirm or verify the value of the home before 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.

Home Appraisal

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’ll be using a mortgage to fund your purchase, 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 upward. When sellers are in a strong position like this, they tend to 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 trusted real estate professional will help you navigate any additional negotiations in the buying process.

    Home Inspection

    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 real estate agent is a key expert to help you through this part of the 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.

    The first quarter market of 2021 in the Hampton Roads region is definitely a seller’s market. Incredibly low-interest rates are bringing buyers out of the woodwork making it a competitive time to buy. And while home prices are increasing, appraisals are keeping them in check. That being said, I’m constantly figuring out how to best help buyers get the winning offer, and sometimes that breaks the rules of what we’ve shared before! For example, I’ve had some buyers “guarantee the appraisal” meaning that if they offer over list price and the appraisal comes in at list price, they guarantee to pay the difference in cash. Sometimes this is only $2000 and with such limited inventory, it’s often the difference between getting a home or waiting another 2-3 months for something else to come on the market. 

     

    I have several other negotiating tactics that I use on a regular basis with my buyers to help them meet their end goals! Let me know if I can help you be the winning bid in a real estate deal! 


    From my home to yours, 

    Dana

     
     
     
    Open House this Saturday the 6th, 1-3pm
     
    4 bedroom, 2 1/2 bath well maintained Historic Hilton Home; charming and move in ready! Wood floors throughout the living, dining, & three bedrooms on the 2nd floor. Vintage style black and white tile floors in the bathrooms. Updated kitchen with stainless appliances. Third floor boasts a spacious primary bedroom with Ensuite bath and walk-in closet. A Mudroom space off the dining room includes laundry and half bath which leads to outdoors. Every room equipped with baseboard heating units on top of the mini splits which were installed in 2015 as well as new windows installed throughout. This Village Proper home also includes a shared split driveway and a one car detached garage which is in good condition and features a French drain around it.
     
     
     

     

    Curious what your home's value is today? Check out this website

    https://bhhstowne.findbuyers.com/DanaRobbins

    Berkshire Hathaway HomeServices Towne Realty
    Dana Robbins
    Realtor
    757-268-6675
    dana@robbinsnestrealtor.com
    www.RobbinsNestRealtor.com

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    1 Old Oyster Point Rd. Ste. 210 Newport News, VA 23602 | (757) 873-6900

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