One common requirement involved in the mortgage process is the ordering of a third party appraisal. This fee is a standard closing cost most all borrowers pay – regardless of lender.
Of course, most of us want to limit our out-of-pocket costs as much as possible when purchasing a big-ticket item such as a home. So it stands to reason a common question I’m asked is:
If I’m Already Paying for an Appraisal, Do I Still Need a Home Inspection?
The answer to this question requires a few more questions:
Q: What is the difference between an Appraisal and an Inspection?
A: This is basically an apples vs. oranges comparison. The home appraiser’s job is to provide a “value” for the home in question. In that spirit, appraisers give a cursory once-over of the overall condition (as it appears to the naked eye) of a home. On the other hand, the home inspector’s job is to help identify structural, mechanical and other issues and deficiencies of the home you’re buying.
Q: When should I definitely spend the money on a thorough home inspection?
A: My advice is – most always a home inspection is a wise investment. Think of a home inspection as the due-diligence that could potentially save you tens of thousands down the road – especially when it comes to older homes.
Q: When could I potentially forego the home inspection process (and cost)?
A: I recommend you don’t take this risk. But there are a few instances where I understand why buyers forego the home inspection:
You’re purchasing new construction and the builder has both a sterling reputation and a solid warranty on the home in question.
You are comfortable with a “high risk – low reward” situation.
You are extremely handy and feel comfortable that you can either inspect the home yourself or can rectify future problems on your own. But – even still – some problems can’t be rectified easily no matter how handy you think you are!
