Do you know the difference between a home appraisal and a home inspection? And which ONE, could potentially save you thousands, if not tens of thousands of dollars?
Hey there, Jamie Bevelacqua with Coldwell Banker, The Rager Group, and today I’m going to give you 5 reasons WHY you should have a home inspection.
But first, I want to get into the difference between a home inspection and a home appraisal.
A home appraisal is done by a bank. As the buyer, you pay for it, but the lender sends out an appraiser to determine the value of the home so they can know the collateral of the loan you’re requesting.
A home inspection is done by an inspector that YOU hire to inspect the many different systems in the home. The inspector will give you a report on the overall condition of the home.
Appraisal = Value of Home
Inspection = Condition of the Home
There are many reasons to have a home inspection.
I like to pose the question, “Would you spend $200,000 of your own money to invest in a stock you knew nothing about?”
You would want to learn everything you could about that stock before you invested that amount of money.
The same applies to a home. You want to know everything you can about that home before you make that purchase of $200,000, $300,000, $400,000.
It’s a lot of money.
The best way to know about that property is through a home inspection.
So let’s get into the 5 reasons to have a home inspection.
1) You Can’t Judge a Book by its Cover
Just what we SEE, may not tell us about the actual condition of a home. That’s why a home inspector will test all the systems of the home. Then he’ll get on the roof, check the plumbing, and the air conditioning unit. Then he’ll write a detailed report on the actual condition of all the systems of the home.
2) It Saves You Money
How does it save you money?
You spend a little bit upfront. The cost of a typical inspection is anywhere between $300-$600 depending on the square footage of the home.
But in that inspection, they may find that the wiring is bad or the roof needs repairs.
That $300-$600 has saved you from maybe having to rewire the house, which can get costly. Or it saves you from having to put on a new roof, which can be $10k, $20K, or $30K.
A little money upfront can save you a lot of money in unnecessary repairs down the road.
3) It Gives You the Ability to Negotiate
In that report, there may be some deficiencies. So now you have 3 options.
Number one, you could do nothing and purchase the home “AS IS.” Maybe the deficiencies don’t intimidate you because you’re handy and you can fix them.
Number two, you could ask the sellers to make the repairs prior to closing.
Number three, you can ask the seller that in lieu of making the repairs they could reduce the purchase price, to take into consideration the repairs needed on the home.
4) Seller Repairs
This piggy-backs on number three—the ability to negotiate.
In Florida, we have two types of contracts.
There’s an AS IS, which is self-explanatory.
And the second is a STANDARD contract. In it, there’s a clause that states the seller is required to make a certain amount of repairs to the home if they’re found.
But if you didn’t have an inspection, you would not know what repairs are needed.
In this contract, the seller is responsible for the repairs. And if the seller doesn’t have the cash to make the repairs?
Now you have the ability and knowledge to negotiate on the purchase price.
5) Know What Your Buying
At the end of the day, you want to KNOW exactly the condition of the home that you are considering.
The best way to do that is with a licensed home inspector.