Home appraisals and inspections are necessary steps in the home buying process.
A new home will likely be one of the largest financial decisions you make in your life. These two steps will provide you with critical information on your upcoming transaction.
Here’s what to expect from a home appraisal and inspection and why they can potentially save you time, money, and headache down the road.
Home Appraisal
When you apply for a mortgage, an unbiased appraisal is the best way to verify the value of a home.
Dustin Harris, Appraiser Coach, further clarifies the appraiser’s role,
“It’s important for everyone to understand that the appraiser’s job in the end is to remain that unbiased third party, to truly tell the client what that home is worth in the current market…”
The appraisal process is critical in helping lenders determine safe loan limits. Today’s housing market is fast-paced and competitive though, meaning home prices and values are constantly changing.
This is causing a problem known as the appraisal gap. This happens when the appraisal comes in below the buyer’s contract price. This can sometimes stop a transaction from proceeding any further.
We can help you prepare for this with our Bulletproof Buyer Program. We help you pivot in case an appraisal gap happens and allow you to continue your home purchase without any delays.
Home Inspection
The inspection is another important process in evaluating a home. While the appraisal determines the current value of your home, the inspection determines the current condition of the home.
“Home inspections are the opportunity to discover major defects that were not apparent at a buyer’s showing… Your home inspection is to help you make an informed decision about the house, including its condition.”
The inspection process will make you aware of any potential problems with the home. Anything from old plumbing to a faulty HVAC system. This will give you the opportunity to discuss and negotiate any potential issues with the seller.
An inspection will help prepare you as a new homeowner. They can shed light on costly issues that would otherwise be a surprise later on.
Source: Keeping Current Matters
Bottom Line
A proper appraisal and inspection will provide you with unbiased information on the value and condition of a home, critical steps in preparing you for your home purchase.
If you’re going through either process soon, we want to help you prepare. NEO Home Loans has created the Bulletproof Buyer program to help you navigate today’s competitive housing market. It’s a four-step process that makes you the most likely buyer to get into a home. The program includes creating a solid Appraisal Gap strategy at the beginning of the loan process, preparing you for a low appraisal.
If you would like to learn how we handle appraisal gaps or would like advice on planning for them in the future, fill out the form below to request a Bulletproof Buyer program consultation with one of our mortgage advisors.