Is buying a home one of your goals this year? Homeownership is a great milestone for many people as it sets the pace for leading a comfortable life. As a result, prospective homeowners take their time to do due diligence on what it takes to buy a home. One of the key things that home buyers consider is the state of the home and the market price. The home should be in good condition, and the price should be as at the current market value of the property. When checking the condition of a home, there are two processes that are crucial before making a purchase decision; inspection and appraisal.
Although these processes are necessary when buying a home, they serve different functions. Here is a breakdown of each process and its significance when you want to buy a new house:
Home Appraisal
A home appraisal refers to an assessment of a home, often analyzed with comparable home sales. An appraisal determines the fair market price of a property. When you need to conduct a home appraisal, you should consult a licensed appraiser. The appraiser will visit the property, but most of the appraisal process will take place in their office. The analysis process involves comparing the features of the home, the location, and other finishes alongside other homes in the given location.
If you are taking a loan to purchase a home, the lender chooses the appraiser. However, the buyer will cater to the appraisal charges as part of the home closing costs. Appraisal costs will depend on the size of the home and the location. The entire appraisal process may take about a few hours. A further breakdown of the appraisal process is as follows:
Property assessment
This is the walk-through by the appraiser through the home. The appraiser notes down the condition of all the facilities in the home. This process is more of a mini home inspection.
Property Review
The appraiser identifies similar homes in the given location. They will look for the findings of those properties so to get their value. The findings will help the appraiser come up with a fair market value of the home.
Summary Report
The appraiser should present a detailed report of the findings with a fair market value. The report will include photos of the home with other comparable sales. A home buyer and the lender will obtain a copy of the report. In most cases, the appraisal presents a higher amount than the home sales price. That implies that you will be paying for a price lower than the market value and are likely to get loan approval.
Inspection
While an appraisal focuses on the value of the property, a home inspection looks at the condition of the home. A home inspection is handled by a licensed inspector who reviews the home’s condition comprehensively. The review of the home is both visual and on the functionality of the facilities in the home. The inspector should provide a home inspection report after the inspection. An inspection report focuses on the parts of the home that require repairs or replacement.
When to schedule a home inspection
Usually, one schedules a home inspection after signing the home sale contract with the seller. The buyer chooses the home inspector based on referrals from friends, a recommendation from the agent, or online reviews. A home inspection takes longer than an appraisal as it is a comprehensive process. Some key systems that an inspector examines include the roof condition, the plumbing system, HVAC, appliances, and foundation.
Is home inspection that important?
Many homeowners may be tempted to skip the home inspection due to the costs a home inspection attracts. However, the inspection costs are a fraction of the home purchase costs, and they could save you from a lot of unforeseen circumstances. It is no surprise that over 80 percent of homebuyers are requesting a home inspection before starting the home buying process.
The decision to buy a home in South East Portland is not one to take lightly. Going through the entire home buying process is necessary to save you from unnecessary trouble in the future. In addition, you will be sure that you are getting value for your money. Do not forget to engage experts in the entire home buying process to save yourself from costly mistakes.
