Working with a mortgage broker is a different experience than working with a bank specialist. It’s also a different part of the home buying process compared to working with your Realtor. Some people may have never worked with a mortgage broker before and don’t know what to expect. Because of that, there are some questions…Read Article
Preparing for Home Appraisals and Home Inspections
Two things that you’ll discuss during your home buying process are home appraisals and home inspections. These two key elements are part of the greater picture of getting you approved for your mortgage and your home sale finalized.
In this article, we’ll discuss home appraisals and home inspections and why they’re needed/recommended.
What is a home appraisal?
A home appraisal is the benchmark for your home’s worth. It’s a legal document that will state the fair market value of a property. This is determined by taking the home, the neighbourhood and available historical data into account when determining the most accurate valuation.
Some things an appraiser will consider:
- The condition of the home
- Square footage, lot size
- Number of bedrooms
- Comparables and the current market
An appraisal is mostly needed if you’re doing a downpayment of 20% or more. It will allow us to go to lenders with this information to determine what mortgage loan is possible based on the purchase price and appraisal.
How is it scheduled and paid for?
When it comes to scheduling and paying for a home appraisal, I will schedule it for the property that a client is interested in purchasing. I have several home appraisers that I work with regularly.
Once it’s scheduled, the client will pay for it.
What happens if the appraisal comes in low?
Once you’ve had the appraisal done and it comes back, what happens if it’s lower than expected? If this happens, a lender will not approve a mortgage loan for a higher amount than what the property is worth. You can negotiate a new price with the seller or walk away from the property to find one within your budget if this is the case.
You may also pay the difference between the appraised amount and the purchase price plus the required down payment if still wanting to purchase the property.
What is a home inspection?
A home inspection is also an important part of the home buying process. The main reason a home inspection happens is to identify and summarize any concerns a buyer should have before purchasing a home.
The home inspection will review things like the roof, general structure, exterior health, the electrical, heating and cooling systems, plumbing and insulation.
Once the inspection is done, the results report will be created. It will include the status of everything within the home and repairs that should happen and any concerns that the inspector had with the property.
This report will be provided for the buyers. Brokers will only need this report if something problematic comes up.
The buyer will also pay for a home inspection.
Are home inspections required?
Home inspections aren’t mandatory in many cases. But, it provides a purchaser with ease and comfortability when purchasing a new home.
What happens if the home inspector finds problems?
If you go forward with a home inspection and the inspector finds problems, there are several things that you can do. First, you can walk away from the purchase and decide to look for another property.
You could also negotiate with the seller for a new purchase price, or you could write it into the purchase agreement that certain problems need to be repaired and fixed before the closing date.
Ready to move forward?
Now that you know the difference between a home appraisal and a home inspection, it’s time to move forward with the process! Give me a call today and we can discuss your options when it comes to securing a mortgage.
Call 250-826-3111, apply on my website or contact me through my online contact form. Whichever way you reach out to me, I look forward to chatting with you and helping you make your home buying dream a reality.