When it comes to purchasing a new home, there are quite a few real estate terms that you should be aware of. Two terms that you have most likely heard or come across a couple times are home appraisals and home inspections. Although they are somewhat similar they are not actually the same thing. Here is the difference between the two.
Home Appraisal
This is a financial assessment of how much the home is worth. Appraisals are required by lenders to see how much the market value of the home is worth prior to the loan application being approved. If the market value is considerably less than the amount of the mortgage, it’s possible that your mortgage financing will not be approved
Your mortgage lender will ensure that the person who is doing the home appraisal is qualified to do so. When it comes to the appraisal value of your home, an appraiser will consider, the location, condition of the property, and the recent sales prices of comparable homes in and around the area.
Home Inspections
Home inspections are less about the financials aspect of the house and more on the condition of the property. The outcome of a home inspection is a report. Home inspections can uncover problems with the house that could end up being deal-breakers, such as mould, asbestos, faulty wiring, leaks, etc. They can still be helpful to homeowners, even if they don’t find anything drastic. They do help homeowners be on the lookout for what will need to be done to the home in terms of repair and maintenance.
A home inspection is generally a good idea to have done, as it helps potential buyers know exactly what they are purchasing. Additionally, some home inspections are included with a condition of purchase agreement, meaning if a home inspection is done and the results of it are not satisfactory, the buyer could call off the deal.
It is up to a potential buyer to hire a home inspector. It should be noted that home inspectors are not regulated, and it is important to do your research when choosing one. Before you agree to hire one, ask about their experience and training, as well as look for some of their reviews online.
One last thing, if you do buy with me, as a gift to you I will pay for your home inspection! I know how important it is to know exactly what you are buying.
