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If I Order an Appraisal, Do I Still Need a Home Inspection?

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!

So in the end my sincere recommendation is to make the investment in your peace of mind – and hire a licensed and experienced home inspector once you find the home you’d like to purchase. If you’d like a reference to someone you can trust, please call me anytime or reply to this email and I’ll be happy to make an introduction.

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