Home appraisals and house inspections. Many first time home buyers aren’t sure of the difference, and don’t know if either are necessary or required. This is an excerpt from “The Essential Guide to Buying Your First Home” covering appraisals vs inspections. Get the free guide at the button below and get on track to become a first time home buyer in 2012.
Appraisals and Inspections
An appraisal is the value of a house based on factors including “comparables.” An appraiser looks at comparable homes in the area which have recently sold, and other things like amenities in the house, and determines the market value. The appraisal helps determine how much money your lender will give you to buy the house. As a seller, you hope for a high appraisal. As the buyer, you want a lower appraisal. An appraisal is not the “worth” of the home, but the market value. Sometimes this amount differs from appraiser to appraiser, but it’s usually a close assessment of the area homes and values.
Inspections – Necessary or Optional?
Inspections may not always be required, but they’re usually a good idea. A pest inspection will tell you whether the home you want has termites, carpenter ants or other pests, or if it had them in the past. This may help you decide whether it’s still the house you want, or if it just needs treatment. It could also help you save money – a home with a pest problem might be bought for less than the asking price. Pest inspections are an important step in the home buying process.
Home inspections cover the house itself, and things like structural issues. A home inspection will also generally include a look at the roof, the heating and cooling system, plumbing and electrical. Since a home inspection is not “exhaustive,” it may not uncover every possible issue. However, home inspections are generally a very important step in the home buying process. Well and septic inspections are generally paid for by the seller, and are most often included in the standard agreement most real estate agents have. This inspection covers the septic system and wells where the home is not tied to “city water.” While some mortgage programs may require specific inspections, they’re not generally a requirement for every mortgage option. However, buying a home without inspections could potentially leave you open for some major issues. Spending a few bucks early in the process could save you thousands down the road.