In the home buying process, both home appraisal and home inspection are very important. These actually help you make the decision whether to purchase a house or not. Home appraisal helps you find out the value of a home. On the other hand, home inspection conducted by a professionally qualified inspector ascertains the conditions of the home. Both these processes are very important and both these processes are powerful enough to halt a home purchase deal. Low home appraisals may come in the way of loan approvals and bad home inspection reports may cause the home buyers to back-track from a home buying deal.
What are home appraisal and home inspection?
Home appraisal is the process of estimating the value of a home. Here it is to be noted that the value of the property is nothing but the current market value of the property. Evaluation of the value of a home is required because the home purchase does not occur very frequently and and every property is different from the others. Home appraisals are conducted by the professionally qualified appraisers and the value of the homes is determined on the basis of industry and specific state regulations. For instance, in the state of California, only the state certified property appraisers are eligible to do home appraisals.
Through home inspection, condition of a home is evaluated. Here the professionally qualified expert examines the structure and the mechanical systems of a house. For home inspection purposes, it is wise to hire an inspector who has the necessary affiliations.
Importance of home appraisal
Home appraisal is an essential element in home purchase. As a standard norm, lenders don't offer a loan exceeding 80% of the appraised value of the home. A particular lender does not offer the loan amount as quoted by a borrower. Instead, the amount of the loan that is to be offered is determined on the basis of the appraised value of the house as determined by a professionally qualified home appraiser. In case the appraised value of the home is less than the purchase offer, then the buyer has to compensate for the difference.
Importance of home inspection
Like home appraisal, home inspection is also very important in home purchase. Buyers make the final decision to purchase a home on the basis of the report of the home inspector. Some home defects are evident even from a layman's eye. But, there are some issues such as foundation of the house, roof, plumbing systems, electrical wiring etc that can only be detected by an experienced home inspector. Inspections bring the items which require repairs in the fore. Taking cues from the report of the home inspector, buyers can request the sellers to repair those items or may request the sellers to accept a lower price.
The fate of a property purchase deal depends very much upon home appraisal and home inspection. A low home appraisal or an unsatisfactory home inspection report may put a home purchase deal in jeopardy.