Those planing on buying a home in the future, an appraisal and home inspection are important steps in the process. An appraisal is an evaluation of the market value of the home you’d like to buy, provided by a licensed appraiser. In most cases, the appraisal is ordered by the lender to confirm or verify the value of the home prior to lending money for the purchase and paid for by the buyer. It’s a verydifferent step in the process from a home inspection, which assesses the condition of the home. Here’s the breakdown of each one and why they’re both important when buying a home anywhere in Northern VA

Home Appraisal

When you apply for a mortgage to purchase a home, an unbiased appraisal is the best way to confirm the value of the home based on the sale price. This is often required depending on the type of loan, and/or loan-to-value ratio. Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn’t loan you more than what the home is worth.

This is critical in today’s sellers’ market where low housing inventory is driving an increase in prices. When sellers are in a strong position, they often believe they can set whatever price they want for their house under the assumption that competing buyers will be willing to pay more.

Home sellers and buyers need to keep in mind the lender will only allow the buyer to borrow based on the value of the home. This is what helps keep home prices in check. If there’s ever any confusion or discrepancy between the appraisal and the sale price, your trusted real estate professional will help you navigate any additional negotiations in the buying process.

Home Inspection

The home inspection is completed by a licensed inspector and a way to determine the current condition of the home. This is not required by the lender, and paid for by the buyer at the time of inspection. If anything is not functioning as intended and identified in the inspection process – like a hole in the roof, a faulty HVAC system, or just about anything else – you as a buyer may have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. This depends on if you include an inspection contingency and type of inspection contingency. Your real estate agent is a key expert to help you through this part of the process.

Here is some further guidance I have written on what to expect from your inspection in Northern VA

Bottom Line

The appraisal and the inspection are critical steps when buying a home, and you don’t need to manage them by yourself. Let’s connect today so you have the expert guidance you need to navigate through the entire homebuying process anywhere in Northern VA.