Appraisal Vs. Inspection: What To Know

What Is A Real Estate Inspection?

A real estate inspection is a thorough examination of a home to determine its present condition and uncover any potential red flags. During the inspection process, a home inspector examines the structure, roof, attic, basement, electrical system, plumbing, exterior and other items on their inspection checklist. If you’re present during the inspection, the inspector will take you through the process, pointing out issues and revealing anything that may be a problem in the future.

After the inspection, you’ll receive a report of their findings. The report will detail what was inspected and list anything that requires repair. Based on these findings, you may negotiate with the seller to have them complete the repairs or pay part (or all) of the repair costs.

The Home Inspection Process

The real estate inspection process involves checking the condition of a home. Typically, this process begins when requested by the buyer as a contingency in their purchase offer. If the offer is accepted, the buyer can hire an inspector of their choice to examine the home’s structural integrity.

An inspector looks for major safety issues or damage in a home, such as:

• Exterior (Is the home structurally sound?)
• Roof (Is the roof old or damaged?)
• Electrical system (Are there safety issues? Does the electricity work?)
• Plumbing (Are there water leaks or sewer line clogs?)
• Water (Is there any water damage? Is the water pressure level safe?)
• HVAC system (Does the heater or air conditioning system work?)

Inspections can help you uncover many problems or potential problems before buying a home, but your inspector may not find all of them. Some issues require special equipment or separate inspections, including:

• Radon testing
• Pest or termite inspection
• Chimney inspection
• Mold inspection

After the inspector examines the home, they’ll report their findings to the buyer. The buyer and seller can use the report’s findings to negotiate repairs or other contingencies. Once the two parties reach an agreement, the home sale can move ahead.

When Is A Home Inspection Required?

While an appraisal is almost always required, inspections generally aren’t. While buyers can request an inspection at their discretion, appraisers are obligated to conduct a basic check of a property’s health and safety. If they have concerns, they may require the inspection of flagged areas or issues.

In a competitive market, some buyers waive the home inspection contingency to make their offer more appealing to sellers. While waiving the contingency may win you the house, an inspection is a powerful tool that can help protect you from financial risks. If you aren’t sure whether to have an inspection done, talk to your real estate agent or another real estate professional.

What Are The Benefits Of An Inspection?

An appraisal is generally required because it helps protect the lender from lending too much and prevents the borrower from paying too much for a property. An inspection should arguably be a requirement because it’s in a buyer’s best interests. Here’s how you can benefit from a home inspection:

• It can help protect your investment and reduce potential risks.
• It can help you confidently determine whether to buy a home.
• It will help you feel safe and comfortable living in the home.
• It will provide a better understanding of your home’s condition.
• You’ll learn more about the intricacies of your home.
• If you’re building a home, it will help ensure proper construction.
• It can give you leverage when negotiating with the seller.