Anyone new to the world of buying a home is likely to become overwhelmed with the entirely new vocabulary and jargon of this particular industry, especially when some terms seem to enjoy a great deal of overlap. Two of these terms you will definitely run into will be “appraisal” and “inspection.” Provided below is a closer examination of both terms and why each of them matters when buying a home.
Buying a home is the biggest investment the average person makes. An appraisal helps protect yourself from scams by conducting a professional and objective assessment of the property and its relevant features and issues in order to provide a proper breakdown of the property’s qualities and value. For a typical home purchase, lenders usually order an appraisal to better inform decisions regarding mortgage funding. It is also worth clarifying that an appraisal is a different procedure than a home inspection; home inspections assess the state of a property before the transaction is completed.
When applying for a mortgage, an unbiased appraisal is the finest way to confirm value based on sale price. However you plan to finance your home, appraisals ensure the bank does not overextend itself in loaning you cash. This situation is notably vital in the sellers’ market that is the current housing market; low inventory causes bidding spikes that can contribute to greater home prices. This means that sellers are in a position of strength, giving them the confidence to set their own price on a home and hoping other buyers will pay more.
It is worth remembering that lenders will only lend what they will based on the home’s appraised value. This is how home prices are kept sane. If you find issues between appraisal and sale price in a region like Estes Park, you can consult one of the trusted real estate companies in Estes Park to help you figure out why this is and how to best negotiate.
While an appraisal figures out the monetary value of a home, an inspection figures out the condition of a home.
When it comes to specifics, an inspection explains the state of (dis)repair, safety concerns and features, and also the quality of the home. If anything odd is discovered during the inspection, like rotting wood or a decrepit HVAC system, you have the option to bring these points up with the seller and negotiate how to go about handling or repair them before you hand over your hard-earned money. If you feel out of your depth in this area of real estate, a quality agent is a vital ally.
Appraisals and inspections are both critical components of buying homes; so critical that there are entire professionals who love to help first-time homebuyers navigate such steps instead of leaving those buyers to survive on their own luck and research. There is no shame in a homebuyer hiring a realtor to guide him through each step toward homeownership.