Essential Contingencies for Homebuyers: Inspection & Appraisal Explained

As a home buyer, there are two contingencies you will most likely put in place with your offer: Home Inspection and Appraisal.

So, what is the difference between the two? You may have a general idea on what a home inspection is, but maybe you're not sure if or why you need one or how it is different from an appraisal. Let’s explore the two, so you as a buyer can be more informed about the process and how it benefits you as a consumer. With a home inspection, once your offer is accepted, getting an inspection is a key part of the process. A home inspection will give you an idea of the overall condition of the home and even more importantly, identify and safety issues or repairs needed.

Realtor.com reports, “A home inspection is something that protects your financial interest in what will likely be the largest purchase you make in your life and one where you need as much information as possible.” If anything comes up questionable in the inspection like roof or foundation issues, an appliance not working properly, the AC unit isn't cooling as it should, that will give you the opportunity to negotiate any replacements or repairs with the seller during your due diligence period.

Now let’s talk about the home appraisal. The appraisal is a report your lender will most likely request and it will give you the home’s value based on comparables in the neighborhood and other factors appraisers use to determine value. According to Real Estate website Bankrate, “An appraisal verifies that the sale price of the home is in line with fair market value. This ensures the home buyer doesn’t pay for more than the home is worth.”

Bottomline, both the inspection and the appraisal are different but very important when buying a home. It is always important to discuss these two contingencies with your agent so you can have expert guidance on your purchase and strategize your offer. Please reach out to my team and I for more detailed information on the appraisal and home inspection process and how we can help you find your perfect home.