Sometimes it feels like there are a lot of hoops to jump through to buy a home—and appraisals and inspections might be two of them. A home appraisal and a home inspection are both important parts of the home-buying process that can protect your financial investment. But what’s the difference between them?
Let’s look at appraisals and inspections in the home buying process to understand the difference between the two terms, why they are important, and answer some frequently asked questions.
If you’ve ever wondered, “how much is my house worth?” you may benefit from an appraisal. When you’re buying a home, an appraisal is usually part of the process.
A real estate appraisal—or home appraisal—involves a walk-through and assessment of the home by a licensed professional appraiser. The appraiser will compare the home’s location and features with other recent comparable home sales in the area to determine the property’s fair market value.
If you’ve ever wondered, “is there something wrong with my house?” you may benefit from an inspection. When you’re buying a home, an inspection is sometimes part of the process.
An inspection looks at the condition of the home you’re buying. A licensed home inspector will use a home inspection checklist to do a comprehensive assessment of the property. After the inspection, they may provide recommendations on items that should be repaired or replaced before closing the real estate transaction.
Most lenders require you to get an appraisal to approve financing your home loan. This ensures they are not financing a loan for more than it’s worth. A home inspection is usually not required, but it is an important part of the home-buying process. It can help you protect your financial interest by identifying any problems with the home.
Some homebuyers are willing to waive an appraisal or inspection if the home is being sold “as is” or if they want the transaction to close quickly due to competing offers.
The biggest difference between an appraisal and an inspection is that an appraisal assesses the value of the home you’re buying, and an inspection assesses the condition of the home.
The average appraisal cost is between $300 and $400. The lender typically hires a licensed appraiser to conduct the appraisal, and the fee is sometimes included in your closing costs.
The average home inspection cost is between $300 and $500. The fee is based on factors such as the home’s size and location.
The buyer pays for the cost of a home appraisal unless this is otherwise negotiated in the real estate transaction. The fee is sometimes included in your closing costs.
The buyer selects the home inspector they want to work with and pays for the cost of the home inspection unless this is otherwise negotiated in the real estate transaction. It is considered a property-related closing cost but typically paid before closing day.
Most lenders require you to get an appraisal to approve financing your home loan. This ensures they are not financing a loan for more than it’s worth.
A home inspection is not required to get a loan, but it is an important part of the home-buying process. An inspection can help protect your financial interest by identifying any problems with the home.
Marine Credit Union can help you find the right mortgage loan to reach your goals. Keep your loan in the community. Get in touch with a Marine Credit Union lender today.