Appraisal or Inspection: Which Do You Need?
East Coast Appraisal Service • May 24, 2023
While trying to buy a home, you may have found out that some lenders require their borrowers to have an appraisal and/or an inspection completed. Some lenders may only require an appraisal and leave the decision about an inspection up to you. Because of this, it is important to know the differences between the two.
Home appraisals are often required by a lender for the initial purchase or refinancing of a home. Home appraisals are a way to determine the value of the home. A lender will not borrow you more money to purchase a home than it is appraised to be worth.
Though an appraisal is usually required by the lender, the borrower (home buyer) is usually responsible for paying for the appraisal. There are times when the seller could pay for the cost of the appraisal, but that is a deal that needs to be worked out through your real estate agents as it is not typically the seller's responsibility. Home appraisals cost around $300 to $450 so make sure to account for that cost when you are saving to buy a home.
To keep it fair, there are regulations in place that require an appraiser to have no connection to the seller and the buyer. This prevents a buyer or seller from having the ability to call in a family member to give a biased appraisal and say that the house is worth more/less than it actually is.
The appraisal value of a home will slightly depend on the state of the current home market and the sale of homes similar in the area, but it is largely based on the state of the home itself.
During an appraisal, the buyer or seller doesn't need to be present. The appraiser will put together a report for both to see after the appraisal is complete.
An appraiser will look at some of the following:
If your home has older plumbing and electrical systems, this could bring the home's value down. The value will also vary depending on the state of the appliances left in the home for the buyer. Once you have gotten an appraisal and you are working on the funding for a home, you should have an inspection of the home done.
A home inspection will check many of the same places that the appraiser looked at, but while the home appraisal was done to look for the value of the home, the home inspection looks at the safety of the home. If a home fails an inspection, the buyer has the option to request a decrease on the asking price or they can ask that the sellers have the repairs made before the purchase goes through.
During a home inspection, it is not required that the buyer or seller be present. It is rather recommended that the buyer be present in case they have questions about any issues that are found.
A home inspector will look at things like:
The inspector will also identify anything that could be a fire hazard. If there are too many things wrong with a home, the buyer can decide to walk away and not buy the home at all. The inspection would typically be done before the appraisal is completed to give the sellers a chance to right any wrongs.
Home appraisals and home inspections are both important steps in the home-buying process. Once an inspection is complete on the home you have your eye on, contact us at East Coast Appraisal Service and we can get you a free quote on your appraisal.
Home Appraisals
Home appraisals are often required by a lender for the initial purchase or refinancing of a home. Home appraisals are a way to determine the value of the home. A lender will not borrow you more money to purchase a home than it is appraised to be worth.
Though an appraisal is usually required by the lender, the borrower (home buyer) is usually responsible for paying for the appraisal. There are times when the seller could pay for the cost of the appraisal, but that is a deal that needs to be worked out through your real estate agents as it is not typically the seller's responsibility. Home appraisals cost around $300 to $450 so make sure to account for that cost when you are saving to buy a home.
Appraisal Process
To keep it fair, there are regulations in place that require an appraiser to have no connection to the seller and the buyer. This prevents a buyer or seller from having the ability to call in a family member to give a biased appraisal and say that the house is worth more/less than it actually is.
The appraisal value of a home will slightly depend on the state of the current home market and the sale of homes similar in the area, but it is largely based on the state of the home itself.
During an appraisal, the buyer or seller doesn't need to be present. The appraiser will put together a report for both to see after the appraisal is complete.
An appraiser will look at some of the following:
- Floor plan
- Square footage
- Number of bathrooms
- Number of bedrooms
- Age of the home
- Condition of the home
- Acreage
- Plumbing
- Electrical
If your home has older plumbing and electrical systems, this could bring the home's value down. The value will also vary depending on the state of the appliances left in the home for the buyer. Once you have gotten an appraisal and you are working on the funding for a home, you should have an inspection of the home done.
Home Inspections
A home inspection will check many of the same places that the appraiser looked at, but while the home appraisal was done to look for the value of the home, the home inspection looks at the safety of the home. If a home fails an inspection, the buyer has the option to request a decrease on the asking price or they can ask that the sellers have the repairs made before the purchase goes through.
During a home inspection, it is not required that the buyer or seller be present. It is rather recommended that the buyer be present in case they have questions about any issues that are found.
A home inspector will look at things like:
- Roof
- Stairs
- Siding
- Plumbing
- Electrical
- HVAC
- Foundation
The inspector will also identify anything that could be a fire hazard. If there are too many things wrong with a home, the buyer can decide to walk away and not buy the home at all. The inspection would typically be done before the appraisal is completed to give the sellers a chance to right any wrongs.
Home appraisals and home inspections are both important steps in the home-buying process. Once an inspection is complete on the home you have your eye on, contact us at East Coast Appraisal Service and we can get you a free quote on your appraisal.
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