The importance of your appraisal
Once your offer is final, your lender will order an appraisal to get a professional opinion on the value of the home – versus how you and the seller value the home.
The appraisal is a necessary step in getting your financing secured and protects you and the bank by making sure the home’s value matches the agreed upon sale price. For example, your lender doesn’t want to lend $200,000 on a home that’s only worth $175,000, and you certainly don’t want to pay $200,000 for a home that’s worth much less.
In your written offer, it’s highly recommended that you make the home purchase contingent on the appraisal and inspection.
The importance of your home inspection
The home you want to buy looked pristine and perfect when you saw it with your real estate agent. So why bother with a home inspection? It’s simple: What if there is an underlying issue with the home that you can’t detect, such as an imminent plumbing issue that could cost thousands of dollars to fix?
Home inspections give you the opportunity to have the home thoroughly examined by a professional before you spend any of your hard-earned money buying it. Paying for a home inspection can be well worth it both for peace of mind and the potential cost of trouble avoided. You can choose your own inspector and your real estate agent should be able to recommend several well-qualified home inspectors if you need assistance.
What can you expect during your home inspection?
Your home inspector will climb on top of the roof, and crawl deep into the attic. Their job is to protect your investment and find any issues with the home, including:
- The roof
- Electrical components
- Heating and air conditioning systems
- The fireplace and chimney
- The foundation
After inspection, the home inspector will provide you with a detailed report on the overall condition of the house, including outlining any issues and necessary, or recommended, repairs.
Having a home inspection contingency in your purchase contract is important because if any major issues are noted in the inspection report, you can renegotiate the sales price, require the seller to make the repairs, or back out of the offer altogether.