People are often confused about the difference between an appraisal and an inspection. They wonder if they need both – the answer is YES!
Sometimes they’re first-time homebuyers looking to save a little money. Other buyers wonder if it’s necessary when the bank is already ordering an appraisal. A lot of people just plain don’t know there’s a difference.
If this sounds like you, don’t be embarrassed. You’re not alone! This guide should be pretty helpful, but if you still have questions after you read this, drop me a line and I’ll be glad to answer them.
1. What’s the difference?
Appraisals are done to estimate the value of a home and they protect the bank first, and you second.
Inspections are more in-depth and protect buyers.
2. What are they for?
Appraisals are focused on the value of the house, and not as in-depth as an inspection.
Inspections are focused on problems you may have to deal with after the sale and look for a lot to protect buyers that appraisals don’t.
3. When should I get an appraisal and when should I have an inspection done?
An appraisal is done before the bank approves your loan to make sure the house is in good condition, and the price makes your loan a reasonable investment.
Inspections are done during the inspection period to give you an overview of the working order of the major components of the house.
4. Do I really need an appraisal and an inspection?
Appraisals are important even when paying cash so you don’t overpay for a property. If you can work it into your budget, it makes sense to get an independent assessment of the value.
Inspections are important even when paying cash for a home. Unless you are a qualified builder or contractor you could miss something important. This can potentially cost you more than the price of the inspection. A smart decision overall.
In short: You don’t need to get both, but it’s highly recommended. There are some major differences between the two, and if you don’t have both done, you might not find out about a big problem until it’s too late.
Click here to see how I work with buyers. If you’re in town too, drop me a line and we can get coffee on me. I’d love to answer all your questions in person! Reach me at 914-447-5847.