Helloooo there!
Sorry I am late today… I had to run to the office this morning and write up an offer (yay!), and then grocery shopping (groan). LOL
Here it is…Sunday again…is it me or is time flying by? My husbands vacation is over (sad face), and my son goes back to school on Wednesday (yeah…happy face!)…..just kidding. 🙂 He will be a junior this year….sigh…how does this all happen? I always feel a bit melancholy at the start of the school year…I mean, it seems like you blink, and your kids grow up! School clothes shopping done, but I still need school supplies for him. I am feeling pretty happy though that I don’t have to get school stuff for the oldest (class of ’11), and the youngest (class of ’28). Ok…..never thought about that….yikes!! 🙂 So, who else is getting ready for fall already???
So, this week we are going to talk a bit about the difference between inspections and appraisals. These are two very important steps in the home buying adventure, but they benefit two different people. The inspection is for the benefit of the buyer…so you know what you are buying. The appraisal is for the benefit of the lender, so that they don’t loan more than the home is worth.
Inspection>>>> Paid for by the buyer, takes about 2-3 hours. You should be at the home inspection, and yes, your buyers agent should be at the home inspection as well. We can’t help, assist, and advise if we aren’t there. The average cost of a home inspection is $325-$350, and while yes, you can get one done for less, you really do get what you pay for. Ask your buyers agent for help. The inspection is again, paid for by you, and is for your benefit. The inspectors job is to give the full story of the home. ALL homes have issues… When the inspector is done you should know more about the home than the sellers do. The inspector works for you, the buyer…no one else. The inspection report is for your benefit, and for your information. You have the right to request repairs, but the sellers have the right to negotiate those repairs. The sellers can do all the repairs, none of the repairs, or some of the repairs. For most loans the lender does not get a copy of the inspection, but there are some loans, or instances where the lender does get a copy of the inspection. So…even if you are ok with the needed repairs on the home, the underwriters can still call out the repair and make it a condition of your financing which means it will have to be done. Please remember that ALL homes have repairs, or issues needing some attention….it’s part of being a home, and doing those repairs is part of being a homeowner. Whatever the inspector calls out for repair is not, by definition, a lender required repair. Most loans/lenders will never see the inspection report and really don’t care about it.
Appraisals???? Again, paid for by the buyer, but you will not be there for the appraisal, and neither will your agent be (for the most part). We are not supposed to be there for the appraiser because really, the bank doesn’t want us to talk with appraiser as they are afraid we might ‘influence’ them. You pay for the appraiser, but the bank orders it. There is no way to chose an appraiser like you chose the inspector. There were some new laws established a couple of years ago that states the lender can not chose the appraiser because, before, there were some appraisers who did whatever they could to make those numbers to stay on the lenders payroll. Now, when you pay for the appraiser, the lender orders the appraisal, and it gets thrown into a ‘lottery’ type of thing and whoever gets pulled up is the appraiser. We have no way of know who is going to be the appraiser, and what they will do. Some appraisers just do some measurements, walk around the home for a visual, and call it good. Some appraisers perform mini-inspections…. we just never know… For instance, earlier this year I had a client buying a home with rotten siding. They were aware the siding was rotten, but they knew people. Rotten siding is a guarantee call out for an appraiser and an inspector. The inspector called it, and the appraiser did NOT! I was shocked…,, but there it is. If the appraiser had called out the siding for repair then it would have become a lender required repair which means the loan can not be financed until the repair is done, and the appraiser comes back out to approve that the repair was done. On the other hand, I had an appraiser come out to a home that was in really good condition and call out the paint around the garage door for re-painting….that wasn’t chipping or anything. Both homes were using the same loan type, but of course, different appraisers. I never feel safe about a home purchase until the home appraisal is done…completed….and turned in. So, the appraiser works for the bank….paid for by you, but yes, they work for the bank. The appraisers number one job is to make sure that the home is worth at least as much as what you are purchasing it for. The bank will only loan you either the purchase price, or the appraised price….whichever is less. It is ok if the home appraises for more…that is good, but the home needs to appraise for at least as much as the purchase price. If the appraiser calls out a repair then it is a condition of the loan, and no financing until the repair is completed.
In a nutshell….the inspector works for you, and the appraiser works for the bank. There is more to it, of course, there always is….but this should help you to understand the difference between the two more. As always….call, text, email, or facebook with any questions!! I am here to help…..
f you know anyone who is thinking about buying a home, our next Saturday class is Saturday, September 8, 2012 at the Vancouver YMCA located at 11324 NE 51st Circle (corner of SR-500 & 112th/Gher Road) from 9am-12pm. Remember….with reservation…we will throw in lunch! 🙂
Please call, email, text, or even facebook me (at Tracie DeMars Real Estate Q&A) anytime with any questions, or if there is anything I can do to assist you with your home buying adventure! As your buyers agent, I am, as always, here to help!! 😀
Thank you again for your business and for your referrals!
…as always…if you have already purchased a home, or no longer would like to receive these emails from me, please let me know and I will be happy to remove you from receiving any more.
Thank you again for attending the home buyer education classes, and I hope that you will continue to refer the classes out to your friends, family, and co-workers. Upcoming class dates and times are located at www.freehomebuyerclasses.com. Just click on the link on the left hand side. Or you can go to www.learningtobuyahome.com and click the links.
We appreciate your referrals and word of mouth! Also, if you have somewhere that we can place the flyers at, please let me know….
:-D
Next Week: Closing costs/downpayment…what are they? A breakdown
Last Week: Buyer questions…answered
Remember that you can always go to ‘Free Home Buyer Education’ on Facebook for all of my weekly blogs and upcoming class dates/times/locations. I post the weekly blogs on there as well.
Have a great day, and I will talk to you soon,
;-D
