One important step that should be included when purchasing a new home is to request an inspection be done on the property. This should be scheduled no later than immediately after a contract has been accepted by both the buyer and seller. Normally, the contract allows a short period of time when this task can be accomplished. The short period of time should be sufficient to inspect and negotiate repair costs if necessary. Inspection identifies the condition of the property prior to finalizing the transaction. Appraisal requires a professional to determine the market value of the property which the buyer desires to purchase. This confirms to the lender the value of the property prior to lending the money. Following is addition information about each of these important steps:
Inspection - Having an inspection will give a buyer a better understanding of its condition and if there are any safety concerns that need to be addressed before finalizing the sale. The inspection checks the condition and performance of HVAC, roof, water pressure, electrical wiring, the present of moisture and wood destroying insects. In my opinion, the buyer and real estate agent should be at the property before the inspector leaves the property to review the report and view problem areas of the property. This gives everybody the greatest understanding of the condition, and this allows the real estate agent to better advise their client.
Appraisal – Purchasing a home is usually the largest investment a person makes, and an appraisal is needed to ensure the buyer gets what he purchases prior to closing. If the purchase is being financed the lender will request appraisal. The lender is making sure he does not fund more than the property is worth. An independent appraiser is the best way to verify the value of the property. During a sellers’ market it is more important for the buyer to ensure there has been an appraisal since it is more likely homes are selling at a higher price and the buyer may have been involved in a bidding war. Finally, a lender will only allow you to borrow equal to or less than the value of the property. This is based on the value provided by the appraisal.
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