Inspections and Appraisals

Inspections and Appraisals2018-09-11T16:48:59+00:00


After your offer is accepted, if you have elected a home inspection (which I strongly suggest you do), then it is time to set up your home inspection. The inspection is your opportunity to get to know what you are buying with the guidance of a building professional. Typical inspections include the home inspection, a pest inspection (the only one actually required by a lender) and a radon inspection. Depending on the circumstances you might also have a video scope of the sewer line, an energy audit, a survey, water or septic test and a review of the zoning or property restrictions, and more. If you are buying a condo you will also have time to review the Homeowners Association Documents. All of these inspections are items that you would have elected to do as part of an offer and have a time frame which they need completed by. Don’t be surprised if a few things show up in your inspection, especially if you are purchasing a “used” house.

Once you get your inspection report back you will reply to the seller in one of 3 ways. 1. Accept the home as is. 2. Terminate the deal and get your deposit money back (if you elected an inspection contingency) or 3. Continue with the deal if the seller is willing to do “X”. Talk with your agent about the best way to go about responding to the inspections.

Your insurance company may do an inspection to make sure they are comfortable covering the home.


Your lender will also do an appraisal. The appraisal is to determine if the home is worth the price you are paying, and if they should give you the money to buy the home. The appraiser is responsible for reviewing the home and making sure it is in a condition worthy of a loan.(FHA and VA loan appraisals are more strict on the condition of the home than Conventional loans)

Occasionally the lender may ask for repairs to be done in order to agree to do the loan, or the insurance company may require repairs in order to issue insurance. In both cases you will have the right to ask the seller to make those repairs, which they may or may not agree to, and you may choose to terminate the deal if they won’t fix them.

The appraisal is an opinion of value stating that the home is worth what you are buying it for. If the appraisal comes in lower than the sale price then the bank will only lender you a percentage of that value, not a percentage of your contract price. If you elected an appraisal contingency you may choose to ask the seller to reduce the price to the appraised value or to terminate the deal. You may also choose to bring additional money to close to make up the difference between the value and the agreed upon price.

With all these steps, and a few others, specific timelines are outlined in your sales contract. It’s important to pay attention to those dates so you don’t forfeit any of your rights in the sales process.

Making Your Offer
Settlement and Closing