You’ve decided you want to buy a house. You’ve chatted around and found your best Realtor to work with (it’s me, isn’t it?!). You’ve looked at houses, submitted an offer and are under contract.
Now, take a deep breath. You can and you will do this.
But really, what’s next?! There are several important next steps and they start with two phrases that many people get confused by: home inspections and home appraisals. Spoiler: they are two different things and are both VERY important, especially when taking out a mortgage. While both are critical to your home purchase, they provide a buyer with two very different things.
After the home inspection, the next big hurdle is typically the home appraisal.
Let’s dive in.
One of the most important things during your due diligence period is to get a home inspection and ask some questions. The home inspection is geared toward providing a general surface layer report on the condition of the home. This will tell the age of appliances, roof, HVAC and identify major safety concerns or hazards. This helps a buyer to gain a deeper understanding of the home they are purchasing. The inspection will not show every single item ‘wrong’ with the home, but just a surface level overview.
Following a home inspection, and typically the completion of due diligence, a buyer’s lender will order and schedule the home appraisal.
The appraisal is an integral part of your home buying process, as it is a requirement of obtaining a loan for your mortgage. The bank who is financing your loan needs to know the value of your home meets (or exceeds) the agreed upon purchase price. Any time the appraisal comes in higher than the purchase price, you’re basically at instant equity; always a good thing!
Home inspections and home appraisals are so much more than just these few paragraphs. It’s so important to work with something who understands that, and the difference between the two. Below is a short guide I’ve created to help buyers identify and understand the difference and prepare for each! I hope to help guide you through this process!
