The home buying and selling processes are quite complex. There are seemingly endless tasks that you must do before and after you make an offer on a house. From getting pre-approved to figuring out what type of mortgage works best to closing on a house, there is a lot to keep in mind. Two of the most overlooked parts of this process are home appraisals and home inspections. These are both very important steps in the buying and selling processes and hold a lot of weight. In today’s blog, Family Home Loan Texas discusses appraisals and inspections and what they mean for you.
Understanding Home Appraisals
A home appraisal is conducted by a third-party professional, and it is when they take an unbiased look at your home and property to determine its value. This is usually paid for by the buyer because it is required by lenders who want to be sure the amount they are lending you doesn’t exceed the true value of the home. Typically, lenders will pay no more than 97% of the appraised amount, and you have to pay the rest. They care about this because if you default on the loan, they want to be sure they can recoup their money. If they give more than the house is worth, they will be taking a loss should they need to sell it.
When an appraiser comes to your house, they will look at the condition and amenities of your home in addition to considering the neighborhood and what other similar homes have sold for recently. Once they have all of the necessary information, they will compile a detailed report that shows not only the home’s value but also how they determined it. Sellers also benefit from this process because it shows them what they can expect from buyers who are taking out a mortgage. It is in their best interest to offer a fair price or not many people will be able to make an offer.
It is also important to note that appraisals are also a part of refinancing. Your lender needs to know the value of the home when providing you with a new mortgage, so they can be sure the changed terms will still ensure their protection should a default occur.
What Is A Home Inspection?
While appraisals are concerned with the home’s value, an inspection considers the overall condition of the home. Yes, appraisals factor this in, but the inspection delves more in-depth. For an inspection, a third-party professional looks over the house to make sure there aren’t any major issues. This is also typically your last chance to walk through the house before closing and making the transaction official. The inspector will look closely at pretty much everything in the house including the roof, HVAC systems, plumbing, wiring, and more. Once they complete this, they will create a list of all their findings. It is totally normal to see a number of small things, and these shouldn’t affect the sale of the house. However, if they come across major issues, it is time to negotiate with the seller. Should something large occur — like needing a new HVAC system, for instance — you can talk with the seller about them fixing the issue before you move in or lowering the price enough to accommodate the repair yourself.
Overall, both inspections and appraisals are opportunities for a professional to full assess the condition of the house, both physically and monetarily. They help protect the buyer, seller, and lender and are essential steps of the home buying process.
Contact Us To Learn More About Appraisals And Inspections
If you have any questions about any part of the home-buying process, please do not hesitate to reach out to us. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about your home loan needs, including reverse mortgage loans.