Buying a home will introduce you to many new words and phrases, many of which can be confused with one another. While they are similar in some ways, they each have their own specific purpose. Let’s look at the differences between the two services and why you should have them completed when you purchase a home.

Home Inspection

An inspection is necessary to ensure you are buying a habitable house that won’t require thousands of dollars of expensive home repairs immediately upon move-in. During a home inspection, a licensed home inspector will go through the home to verify that all of the home’s mechanical systems are in working order. Some inspected systems are the heating and cooling systems, plumbing, electrical panel, and pretty much anything else with an on and off switch. Inspectors can also do visual inspections of the roof and other home areas, but it is essential to remember that they are not experts in all areas. They may refer you to a specialist if there are areas of concern beyond their license to inspect.

Appraisal

The purpose of a home appraisal is to determine the value of the home you are purchasing. It is supposed to protect a home buyer from paying too much for a home but is only required when the buyer gets financing on a home since banks will not lend more than the appraised value. They will compare the condition and features of the home to similar homes which have recently been sold in the area. The appraiser will also check some of the home’s systems to ensure the home can be lived in safely. They will make sure the major appliances work, that there appears to be no damage from wood-destroying pests, and that the windows can properly open and close, among other things.

If the appraiser determines that the agreed-upon purchase price is more than the value of the home, the buyer will need to make up the difference in cash. So if you are under contract for $400,000 but the value is only $380,000 you will have to bring $20,000 cash to the closing table on top of your down payment.

Can I Save Some Money And Get One Or The Other?

It is best to have both an inspection and appraisal to confirm the value and the condition of the home and everything that comes with it. Home inspections performed by a licensed inspector are not a requirement to get loan approval, but that does not mean the homebuyer should skip this process.

Yes, they are costly; a home inspection will likely cost between $200-400, and an appraisal will be another $350, but in the end, they are worthwhile to the new homeowner and could potentially save you thousands of dollars in the long run.

If you have any other real estate-related questions, The Villa Group at PAK Realty is here to help. We have helped hundreds of buyers and sellers in the Las Vegas area and are happy to guide you through the process. Give us a call or contact us through our website, and one of our agents will be in touch.