When you're ready to purchase your first home, you might encounter unfamiliar terms and conditions. While you likely understand the concept of an inspection, you may be uncertain about its necessity or how it differs from an appraisal. Here's a straightforward breakdown of each and their significance for you as a homebuyer.

Home Inspection

Getting an inspection done after you've gone under contract on a home you want to buy is crucial. It helps you understand the safety and general state of the property, which is vital for a significant transaction, like buying a house. According to a recent article on Realtor.com:

““A home inspection is something that protects your financial interest in what will likely be the largest purchase you make in your life—one in which you need as much information as possible.”
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— Realtor.com

If you have any concerns during the inspection, such as the roof's age, the HVAC system's condition, or anything else, you can bring them up and talk about potential issues or repairs with the seller before completing the transaction. Your real estate agent will support you and handle negotiations with the seller on your behalf.

Home Appraisal

The inspection provides insight into the home's condition, whereas the appraisal determines its value, as outlined by Bankrate.

““When buying or selling a home, an appraisal verifies that the sale price of the home is in line with fair market value. This ensures the homebuyer doesn’t pay more than the home is worth, and the mortgage lender doesn’t lend more than it is worth.”
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— Bankrate

If you're planning to buy a house with a mortgage, the appraisal ensures you don't overpay and prevents the bank from lending more than the home's value.

If there is ever any confusion or difference between the appraisal value and the price agreed upon in your contract, your real estate agent will assist you in navigating any further negotiations to bridge the gap.

Bottom Line

The inspection and the appraisal serve unique but essential roles in the homebuying process. You don't have to handle them alone. Contact us today for expert guidance throughout.