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5 Reasons Selling Your Home As-Is Can Save You A Lot Of Money.

Home Inspection VS Appraisal

July 19, 2020

Investing is a big step, and having piece of mind of receiving the return on your investment is essential. One of the biggest investment decisions we make today, is that of a home. The biggest goal is to reduce the risk of not getting the expected return on your home investment. That’s why getting a home appraisal and inspection is vital in preventing this. However, there is a difference between the two, and how they affect your home buying process. Let’s talk a look at how the two can give you a positive investing experience.

What is an Appraisal?

Appraisals are required in order to receive a loan for the home. When it comes to the appraisal process, different factors are used to determine the worth of the home. Such as the worth of similar homes in the area, the home’s physical condition, cosmetic details, level of crime in the area, and nearby amenities. The home’s market value is determined by a final report given by the appraiser, this report has many factors in the lender's result decision as to if the loan is approved or not. Another important factor to take into account, is that the lender cannot lend anything above 97% of the final appraisal of the home. Meaning, depending on the appraisal worth, you may have to pay some out of pocket cash, or you will have more equity of the home.

What is a Home Inspection?

A home inspection is a more through and physical examination of the condition of the home. These are conducted by a home inspector who uses a checklist to look at the basic structure, roofing, plumbing, etc. They can also inform you of anything that stands out to them during the inspection. When the inspection is finalized it will give you the tools necessary to negotiate price based on the repairs needed in the home. One thing to note is that home inspections are not required by the lender, and do not affect the amount of the loan given. They are also helpful to the owner to point out certain safety issues that may be present in the home. Overall, the home inspector is trained to assess the actual home itself based on the structure and different parts of the home.

In Summary

Overall, both help determine the worth of the home and whether you should invest in the property. The appraiser's biggest goal is to determine the value of the property, while the inspector is more focused on the condition and potential problems with the property. On one hand the appraisal gives the home’s value, while the inspection gives a report of the final condition and quality of the property. The value of the home is determined by these two things. The two jobs are both essential for the homeowner, potential buyer, and lender. Some may consider the appraisal more of an “opinion,” while the inspection uses physical tools and training to assess the condition of the property.

Along with all of this, the two do have similarities. The two only help the buyer and the lender, there is no catch involved with either. They also can put the buyer at ease with knowing what they are getting themselves into. Both are also worth paying for, as they give you an honest, confident, and educated report of their findings. Also meaning neither of them benefit from the results of the appraisal and inspection, they receive no commission based on the findings. The two together, ensure the potential buyer and homeowner of the status of the property.

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