Inspections vs. Appraisals
Pt 1 – The Home Inspection
After you have an accepted offer on the sale of your home, the next steps are usually for the buyer to have a home inspection and for the lender to order an appraisal. What’s the difference? And how do you prepare for both?
What’s the difference?
- A home inspection occurs when the buyer hires a professional home inspector to examine the major systems of the home (plumbing, electrical, heating and air conditioning, plus appliances) as well as the major structural components (roof, foundation, basement and crawl spaces, if any). NOTE: Multiple inspections may be conducted for things a general home inspector doesn’t cover such as pools, septic systems or sprinkler systems.
- An appraisal requires a certified appraiser to review your home’s location, size and features to determine the reasonable market value, and is usually ordered and reviewed by the lender for purposes of loaning the buyer money to purchase the home.
Preparing for an Inspection
While you were preparing your home for sale, you likely addressed any issues you already knew about or any you found in the process. Even so, the inspector will look at things in a different way than you do as the owner, so be prepared to be surprised.
The inspector will generate a report that lists major safety issues (if any) as well as routine maintenance items and sometimes even a few cosmetic issues. There is no way to tell which repairs a buyer will ask you to do, since everyone’s comfort level with home repairs will vary.
Whether or not you did any pre-listing maintenance, here are five tips for preparing for your home inspection:
- Treat the inspection like a showing, and plan to be out of the home for 2 – 3 hours. The buyers usually attend and this is an important time for them to learn about how the home systems work and to start planning how they will make the various spaces in the home work for them when they move in.
- Ensure all utilities (electric, gas, water) are on for the inspection. If you live in the home, you probably think, “Of course the utilities are on.” But there are examples of times when a specific utility might not be on. Examples include: Sprinkler systems in the winter and fireplace gas lines that are sometimes shut off in the summer.
- Provide open access to areas that need to be checked. Make sure that the home inspector has easy access throughout the property. If they can’t get to an area, they can’t inspect it, and that will be a red flag for buyers. Clear away any clutter impeding access to areas or systems that the inspector needs to take a look at, including a crawl space or basement, the attics, furnace room, and under the sinks.
- Replace any bulbs that are out. A blown bulb suggests two things to a home inspector: either the bulb itself is out, or there’s something faulty in the fixture’s wiring. The inspector will either have to waste time determining whether a fixture is inoperable or they’ll simply note that there’s a possible defect without looking further into it. Avoid both of these scenarios by making sure that all of your bulbs are in working order.
- Put in a fresh furnace return filter. Regularly replacing the furnace filter in your home is important for air quality and the overall functioning of your heating system. Instead of making the inspector concerned that you haven’t been taking good care of your home’s heating and air, clean or replace the existing filter and show that it’s something you do pay attention to.
Once the inspection is complete and any requested repairs have been negotiated, the next step will be the appraisal.
In our next post, we’ll discuss the different kinds of appraisals and how you can prepare for those. In the meantime, feel free to reach out if you have questions about selling your current home or buying a new one.