The bottom line of home buying is twofold:  are you paying the right price, and are you getting what you are promised or told?  In both cases, you need to determine the value of the home, and as such an appraisal is required.  A lender will usual require that a professional third party appraise the property to determine the value.

Appraisal

An appraisal determines the value of the property by estimating the market value of the land and building for purposes of security in a mortgage transaction.  An appraisal does not usually, but may, include a detailed property inspection because the value is usually based on the land as opposed to the building.  Lenders are also concerned that the borrower will not have to incur costly expenditures on repairs or renovations which may cause the borrower difficulty because of financial drain. This is a valuable informational source for home buyers as well, ensuring that they are getting what they are bargaining for and will not be put in a position where they cannot meet their financial obligations.

Inspection

A home inspection does not result in a professional opinion on the value of the property. It merely inspects the adequacy and condition of the building and all major systems. Although an appraisal may provide sufficient security for a lender to provide mortgage financing, an inspection may reveal that the building and systems may are not be up to par and will require costly repairs.  A good inspector will provide the potential purchaser with a schedule outlining the estimated cost of repairs and when they will need to be done. An inspection therefore allows the purchaser to make an informed decision of purchase.

An INVIS Mortgage Consultant can help you find professionally qualified appraisers and inspectors.