As Michigan Mortgage Loan Officer Dave Lehner would say, “Don’t buy a money pit!”
What exactly does that mean?
Appraisals are required as past of the home-buying process. Home inspections are not, but they may be one of the most beneficial things you can do for your financial future. A home inspection will ensure that you don’t buy a money pit.
Here’s the difference between the two.
- An appraiser provides a professional opinion of the home’s value. They do not analyze the “systems” of the home.
- The goal is to make sure buyers are not overpaying for a home.
- A home is appraised based on size, the number of bedrooms and bathrooms, functionality and recent sales of similar properties in the area.
- The cost is typically between $400 and $575.
- A home inspector will examine the physical structure as well as the “systems” of the house ranging from the foundation to the roof.
- The home’s HVAC system, plumbing and electrical components, roof, attic, insulation, walls and ceilings, windows and doors, floors, foundation and basement will be assessed.
- The home inspector is a licensed professional.
- Buyers can use the inspection results to renegotiate the purchase price and request that the sellers make home improvements.
- The cost is typically between $300 and $500.
As lenders, we’re responsible for ordering appraisals before proceeding to the closing table. We have no control over which appraiser is assigned to which home. The homebuyer is typically responsible for paying the appraisal fee.
Because the home inspection is not required, inspectors are hired by the homebuyer. We work with a pool of reliable experts and are happy to recommend one that will best meet your needs. The home inspector is working on the buyer’s behalf, so the cost is paid for by the buyer.
If you have questions about appraisals or home inspections, don’t hesitate to reach out. We’re here to help in any way we can!