Home Inspections and Appraisals
A frequently asked question by first time home buyers is, what is the difference between a home inspection and an appraisal?
A home inspection is requested and paid by the buyer. When writing an offer you have the choice to request an inspection and this offer is contingent on this inspection, this choice is always recommended. The inspector will spend at least 3 hours in the home and will check the insulation, structure, electrical, exterior, interior, plumbing, roofing, heating, cooling & appliances. The inspector does not check cosmetics unless it affects the overall condition of the home. The inspection costs between $360-$450 depending on the size of the home. Buyers will do a walkthrough with the inspector and look at the findings, then they will receive a full inspection report via email.
An appraisal is requested by the bank and it is part of the financing contingency. The bank will send an appraiser to the home to verify value and condition, but they only spend a few minutes in the home and just take a quick look. They focus on value in the area to be able to support the purchase price of the offer.
There are 2 types of appraisal, for conventional and FHA loans. When a buyer is using FHA financing (insured by the government) the home needs to meet certain requirements to “pass” the appraisal. Smoke detectors, carbon monoxide detectors, stairs railings, exterior paint and GFI’s are part of these requirements. With conventional these requirements are not needed, most sellers like to work with conventional loans because it is easier and they don’t want to delay the process with possible repairs requested by the bank. Appraisals are typically over $450 and many lenders charge this upfront once buyers have an accepted offer.
It is very important that your agent understands types of financing and works towards finding a home that fits your needs, personally and financially. There are many homes on the market that are not FHA approved, so agents must make sure that the home will work for your type of financing.
For more information you can call/text 612.322.0132 or email mariashuntwork@mnhomemaster.com.