These two parts of the real estate transaction may sound similar, but are actually quite different. The information below may help your clients understand them better. Feel free to share.
An appraisal is done to help determine the value of the property for the lender. An inspection is done to educate the buyer about the condition of the home and any issues that may impact the sale.
The home inspection is a standard part of a real estate transaction, typically occurring after a potential buyer has signed a purchase and sale offer on a house. While not legally required, it is considered best practice when purchasing a home, and is paid for by the buyer. The job of a home inspector is to conduct a visual examination of a house or building consisting of less than four units to assess the overall condition including plumbing, heating, electrical, cooling and major appliances.
The lender requires a property appraisal conducted by a licensed appraiser to determine the property’s market value. The appraiser includes a visual inspection, along with the location, size and selling price of similar homes in the neighborhood to determine valuation. Typically, the lender will contact the appraisal company, and the appraiser will then contact the seller’s agent or seller directly to schedule. The buyer should receive a copy of the appraisal. The cost is paid by the home buyer at closing and can be several hundred dollars.
In New England, Fairway works with a select appraisal pool to ensure that we are able to provide timely and accurate appraisals for our borrowers.
The material provided in this newsletter is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors.