Both home inspections and appraisals are important steps in the process of a home purchase. In short, the key difference is a home inspection allows a prospective buyer to assess the safety and current condition of the home before the sale is complete, while an appraisal assesses the home’s value. They can also both cause closing delays. Here is a breakdown of each and why they are both important.
Home Inspections
A home inspection provides in-depth information on the overall condition of the home. These would include such things as the condition and age of the roof, the home’s HVAC system, electrical system and even if there is water damage. It identifies what needs improvement or repairs, and as the prospective buyer, you can opt to negotiate any of these issues or repairs with your seller before closing. Is it worth it? Absolutely. A home inspection can give you peace of mind knowing that any significant issues have been identified and eliminate any surprises down the road.
Appraisals
An appraisal assesses the current condition of the property and market conditions to determine how much the home is worth. An appraiser will look at things such as past sale history, recent sales, comparable houses in the area and any upgrades or damage to the home. If you are taking out a mortgage for your purchase, the appraisal report, which is oftentimes required by the mortgage lender, will make the bank does not lend you more than what the property is worth. Similar to a home inspection, the buyer and seller may have the option to renegotiate if the Sales Price is much higher or lower than expected.
Is an Appraisal worth it? Yes, it is well worth it! Even if an appraisal is not required for your purchase, such as with a cash transaction, you want to make sure that you are paying what the home is worth on the market- not what it is worth to the seller. It is well worth it!
Written by Stephanie Dudley Caster of
Federal Title & Escrow Company on 2023-05-02
Home inspections and appraisals are important steps
Title Junction is a full service real estate title company serving the area of Fort Myers, Cape Coral and the entire state of Florida since 2005. The company handles a number of real estate title services for both commercial and residential properties.
Have questions? Give us a call at 239.415.6574.
In case you missed it, check out our last Title Junction post: How to Avoid an Escrow Dispute in Your Real Estate Transaction