One of the most important steps in the home buying and selling process is often overlooked: the home inspection. While many buyers and sellers alike are wary of inspections (for fear of finding the dreaded "deal-breaker"), in reality thorough and timely inspections \help smooth the process and prevent headaches during or after closing.
The Difference between Appraisal and Inspection
Many consumers are unclear regarding the difference between a home appraiser and a licensed home inspector. A house appraisal is an independent evaluation of the current market value of the home. Generally speaking, the appraiser's job is to review the property to determine its worth relative to similar properties in the area and recent sales history. With that value set, the lender can determine how much money can appropriately be loaned to the buyer. Appraisers typically work for the bank, the FHA, or HUD depending on the type of loan.
In contrast, the house inspector is trained to identify items in the home that need either replacement or repair. A licensed inspector will carefully examine the home's structural components, heating, cooling, plumbing and electrical systems, insulation, roofing and so on. A home inspection report will give far more detailed information than available in a home appraisal.
While an appraiser will perform a walk through of your home, it is typically a cursory examination that lasts between 15 and 30 minutes. An in-depth home inspection will last from two to three hours. An appraiser may point out potential problem areas, but they are not trained to spot damage or faulty systems. Only a certified inspector can adequately review the quality and condition of a home for sale.
Seller's Perspective: Informed Buyers, Added Protection
Many sellers choose to have their home inspected before ever putting the property on the open market. Such presale inspections are combined with the seller's disclosures to form a comprehensive disclosure package of documents about the home.
Some sellers shy away from this practice, feeling that it is an unnecessary expense when many buyers will obtain their own inspection anyway. But presale inspections aren't meant to replace the inspection an interested buyer will seek, rather they are meant to increase a potential buyer's knowledge about the property. Well-informed buyers will be less likely to walk away from a property that they like, and by providing a disclosure package you show buyers that you are negotiating in good faith.
The presale inspection is also a safeguard against potential home defects that might affect a future closing or even worse result in legal action after the sale of the home. An early inspection can help you identify any items you that will require either repair or disclosure (and possible concessions) as you move forward.
Buyer's Perspective: Cost-Effective Peace of Mind
A presale inspection provided within the seller's disclosure package does not mean that smart buyers should go without a second inspection by an inspector of their own choosing. In general, a home that has been thoroughly inspected benefits buyer and seller alike.
Buyer-driven inspections are common contingencies in many sales contracts. While some sellers may request a specific inspector, most will allow the buyer to pick an inspector without restriction. If a seller will not pay for all or part of the inspection without first approving the inspector, consider paying for an independent inspection out of pocket. Look for experienced inspectors with a strong reputation in the community (see the "Finding the Right Inspector" section below).
Occasionally a buyer will opt instead to do a walk through with the original presale inspector to gain further information about items in the disclosure package. While this does give the buyer the chance to ask questions about the property (and it is better than no inspection at all), it's usually best to have a true second opinion whenever possible.
Specialist Inspectors
If the general inspection identifies problems or potential defects, seek a second inspection by a specialist. The reason for this is simple: while home inspectors are trained to spot defects throughout your home, by their very nature they do not have specific expertise with every single structure or system in the house. For example, an inspector may cite signs of wear on a HVAC system as possible evidence that a replacement is in order. Calling in a licensed heating contractor may either confirm the existence of a problem or show that the general inspector was mistaken.
Additional inspections do come with an expense, but they can prevent surprises after closing or eliminate unnecessary repairs, the cost is easily offset. If the general inspector recommends additional inspections (which is often the case), you should heed the advice.
Finding the Right Inspector
Whether buying or selling, picking the right inspector is an important decision. A good inspector will be experienced, meticulous and plainspoken. It pays to use a home inspector with a proven track record in your area. You'll also want an inspector who will stand by their work and take responsibility for any oversights or errors. If the inspector is also a general/repair contractor, they should disclose this information upfront. Both seller's and buyer's agents can typically provide referrals of qualified inspectors. You can also check for local members of the National Association of Home Inspectors (NAHI) or the American Society of Home Inspectors (ASHI), two of the most respected home inspection associations.
National Association of Home Inspectors: www.nahi.org/
American Society of Home Inspectors: www.ashi.org/
The article is taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site.
The Difference between Appraisal and Inspection
Many consumers are unclear regarding the difference between a home appraiser and a licensed home inspector. A house appraisal is an independent evaluation of the current market value of the home. Generally speaking, the appraiser's job is to review the property to determine its worth relative to similar properties in the area and recent sales history. With that value set, the lender can determine how much money can appropriately be loaned to the buyer. Appraisers typically work for the bank, the FHA, or HUD depending on the type of loan.
In contrast, the house inspector is trained to identify items in the home that need either replacement or repair. A licensed inspector will carefully examine the home's structural components, heating, cooling, plumbing and electrical systems, insulation, roofing and so on. A home inspection report will give far more detailed information than available in a home appraisal.
While an appraiser will perform a walk through of your home, it is typically a cursory examination that lasts between 15 and 30 minutes. An in-depth home inspection will last from two to three hours. An appraiser may point out potential problem areas, but they are not trained to spot damage or faulty systems. Only a certified inspector can adequately review the quality and condition of a home for sale.
Seller's Perspective: Informed Buyers, Added Protection
Many sellers choose to have their home inspected before ever putting the property on the open market. Such presale inspections are combined with the seller's disclosures to form a comprehensive disclosure package of documents about the home.
Some sellers shy away from this practice, feeling that it is an unnecessary expense when many buyers will obtain their own inspection anyway. But presale inspections aren't meant to replace the inspection an interested buyer will seek, rather they are meant to increase a potential buyer's knowledge about the property. Well-informed buyers will be less likely to walk away from a property that they like, and by providing a disclosure package you show buyers that you are negotiating in good faith.The presale inspection is also a safeguard against potential home defects that might affect a future closing or even worse result in legal action after the sale of the home. An early inspection can help you identify any items you that will require either repair or disclosure (and possible concessions) as you move forward.
Buyer's Perspective: Cost-Effective Peace of Mind
A presale inspection provided within the seller's disclosure package does not mean that smart buyers should go without a second inspection by an inspector of their own choosing. In general, a home that has been thoroughly inspected benefits buyer and seller alike.
Buyer-driven inspections are common contingencies in many sales contracts. While some sellers may request a specific inspector, most will allow the buyer to pick an inspector without restriction. If a seller will not pay for all or part of the inspection without first approving the inspector, consider paying for an independent inspection out of pocket. Look for experienced inspectors with a strong reputation in the community (see the "Finding the Right Inspector" section below).
Occasionally a buyer will opt instead to do a walk through with the original presale inspector to gain further information about items in the disclosure package. While this does give the buyer the chance to ask questions about the property (and it is better than no inspection at all), it's usually best to have a true second opinion whenever possible.
Specialist Inspectors
If the general inspection identifies problems or potential defects, seek a second inspection by a specialist. The reason for this is simple: while home inspectors are trained to spot defects throughout your home, by their very nature they do not have specific expertise with every single structure or system in the house. For example, an inspector may cite signs of wear on a HVAC system as possible evidence that a replacement is in order. Calling in a licensed heating contractor may either confirm the existence of a problem or show that the general inspector was mistaken.
Additional inspections do come with an expense, but they can prevent surprises after closing or eliminate unnecessary repairs, the cost is easily offset. If the general inspector recommends additional inspections (which is often the case), you should heed the advice.
Finding the Right Inspector
Whether buying or selling, picking the right inspector is an important decision. A good inspector will be experienced, meticulous and plainspoken. It pays to use a home inspector with a proven track record in your area. You'll also want an inspector who will stand by their work and take responsibility for any oversights or errors. If the inspector is also a general/repair contractor, they should disclose this information upfront. Both seller's and buyer's agents can typically provide referrals of qualified inspectors. You can also check for local members of the National Association of Home Inspectors (NAHI) or the American Society of Home Inspectors (ASHI), two of the most respected home inspection associations.
National Association of Home Inspectors: www.nahi.org/
American Society of Home Inspectors: www.ashi.org/
The article is taken from one of our recent Newsletters that was e-mailed to all registered subscribers, via our RE/MAX of New Jersey web site.
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Lawrence Yerkes
