The process of buying a new home includes getting an appraisal and a home inspection. Craig West, a trusted advisor from Berkshire Hathaway HomeServices Indiana Realty, explains the importance of understanding what the appraisal means in the home buying process.
West says an appraisal is important because it is a mandatory part of the mortgage. “The appraiser is looking at what the market has done historically. So they are looking back six months to see what homes are comparable to the subject property and see what they sold for,” West said.
If you disagree with an appraisal, you can dispute it, but it is not very common in the market we are in today. “The market value is changing quickly. The appraisal is an opinion of value so it does get into subjective opinion of value. If your trusted advisor can show there are better comparable sales out there, then yes, you can actually challenge the appraisal,” West said.
A home inspection is also a key aspect when purchasing a home. “The seller’s will disclose to you what they know about the property. However, like any typical seller, they are not going to be up in the attic or in the crawl space. The inspection is important to have so a professional can get in those areas in the home and give you an opinion of what they think about the main components of the home,” West said.
Inspectors will typically invite buyers to be at the home at the time of the inspection. “They will walk around the house with you to show you the things that they are concerned about and things that you need to pay attention to for ongoing maintenance and those type of things,” West said.
After the inspection is over, it is important to work with a trusted advisor during your negotiations. “The inspection response comes into play at that point in time. We are not looking for minor maintenance issues, but we are looking for things that need to be corrected by the seller because that could cost a lot of money down the road,” West said.