Judith Sutton ABR CRS IDS PMN ASP IAHSP SRES GREEN
Judy@JudithSutton.com 908 803-0472
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Home Inspection Versus Home Appraisal
What's the Difference?
...and what does it mean for your transaction?
Home inspections and appraisals are not the same.
When do you order a home inspection?
You order a home inspection after you make an offer on a house and the seller accepts it. Your home inspector will tour the property, looking for problems both large and small. When the report arrives, you finalize the sale, adjusting the price according to what the inspector has found.
For example, if the inspector found a major issue such as a sinking foundation or a damaged roof, you can request: a. that the seller fix the problem, b. lower the house's final sale price or c. provide you with the funds to hire a contractor on your own. This is where the negotiations come in.
In other words, a home inspection is a type of safety net. If the inspector finds several expensive problems and the seller isn't willing to address them, you might be able to walk away from the sale without losing your earnest-money deposit. In the Central New Jersey market, this is certainly possible.
I do not advise my clients to skip the inspection, even though you have to pay for it. If you do, you might end up with a costly problem after you move in.
When do you order a home appraisal?
If you are selling or refinancing your home, an appraiser will visit your property to help determine your home's market value.
If you are selling, the buyer's lender will send an appraiser to tour your house and will have them study the sale prices of similar homes in your community. The appraiser will use this information to determine how much your house is worth. The appraised value needs to be at least as high as the buyer's offer price.
If the appraiser says that your home is worth $450,000 and your buyer is paying $430,000, that is fine. But if the appraiser says that your house is only worth $410,000 and the buyer is paying $430,000, that can cause problems — your buyer's lender won't provide a mortgage loan worth more than your home's appraised value.
You might be asked to lower your price to $410,000. If you're not willing to do this, the buyer would have to find an extra $20,000 in cash because their lender will provide a mortgage of only $410,000. If neither of you are willing to take these steps, your home sale will fall through.
Appraisals also matter when you are refinancing. Most lenders require that you have at least 20% equity in your home before they approve you for a refinance. They'll send an appraiser to your home to determine its market value so they can calculate how much equity you've built.
While home inspections and appraisals are different, they're both important to the real estate process. And whether you're buying or selling a home, you'll certainly run into both home inspectors and appraisers.
Specialized inspections for buyers to consider
While inspecting the home's major systems and features is standard practice, your inspector may recommend a second, more specialized inspection if they notice issues including:
Radon
Pests
Septic
Lead paint
Why home inspections are important
The few hundred dollars you'll spend for a home inspection is a small price to pay for the opportunity to confirm that the home you're about to buy is free of major — and costly — issues. While disclosures (provided by the sellers on the Property Disclosure form) are an important protection, they only cover un-repaired issues that the seller knows about — there’s no guarantee that the home is free of other underlying issues or that the repairs were made correctly. A home inspection is simply the best way to find out about any potential problems in the home!
From the moment our offer is accepted, I will make sure everyone feels like they are a part of our team. I will support you every step of the way in areas big and small to make things easier — and to make certain you know you’ve found a new home.
I’d love to give you a detailed picture of what our company can do for you!
By incorporating my personal attention and guidance into the marketing strategy I aim to provide you with
an Exceptional Selling Experience
while ensuring that your property receives the exposure needed
to attract buyers from anywhere
Your Local Real Estate Connection
Get a positive, helpful partner for buying or selling your home:
Trusted resource for answers about the process
Innovative marketing strategies
Expertise about neighborhood features
Ability to target home searches
Strong negotiation skills
Support through the closing and beyond
Why would you settle for anything less?
Adding value for my clients and loving where we live!
Judy@JudithSutton.com
COLDWELL BANKER...GUIDING PEOPLE HOME SINCE 1906
908 803-0472
"...the right relationship means everything..."
SERVING THE SOMERSET HILLS AREA ONE CLIENT AT A TIME
Service & Experience
since 1983