Albuquerque Real Estate Market: The Difference between an appraisal and a home inspection

by | Feb 8, 2021 | Podcast, Radio | 0 comments

Tracy Venturi: What’s the difference between an appraisal and home inspection?

Tego Venturi: So, an appraisal something that happens after a home goes under contract while, buyers want to buy this home to pay this much money for it. And so the bank hires an appraiser to come out. Look at the property and compare it to other homes that have sold for comparison methods. You look backwards. Okay, is the bank, making a good investment by loaning this person, this much money, for this property? So it’s not really. People always get mixed up. Does it, establish value and justifies the value that the buyers are willing to pay.

Tracy Venturi: So basically the appraiser is being the eyes and ears of the bank who doesn’t go out to the house to make sure, yes this is the house it’s the quality that we want to lend this much money on. So the appraiser is really just making sure for the bank that they’re making a good loan.

Tego Venturi: Something that confuses people a lot, a lot of times you’ll hear lenders, or people in lending side of the business say yes, the appraisal inspection is on Tuesday, well, they call it an inspection but it’s not true like home inspection which I’m gonna ask you about in a second, it means that the appraisers coming out they’re gonna look at them. Now they are checking the basics are there right you’ve got hot and cold running water, you’ve got heat.

Tracy Venturi: You got the stove, you don’t have to have cooling.

Tego Venturi: It’s got a roof that doesn’t leak. You want to make sure that the general condition of a home is good. Doesn’t get to be perfect, but different lenders and standards have different things so like a VA loan is much more strict on the condition of the property. Let’s say the convention, so that that’s the appraiser. So, Tracy. What is a inspection in the sense that we’ve talked about inspection?

Tracy Venturi: Right, so home inspection is an inspector who comes in and turns on every faucet turns on the checks all the electrical outlets open and closes windows checks the roof, checks the foundation, kind of walks around your room and checks, everything from nuts to bolts, right from roof to foundation to drainage, and they provide a written report that that’s, you know, very different than what an appraiser does an appraiser doesn’t check everything to make sure it works they just to have a few bullet points.

Tego Venturi: Because I’ve heard this term, you get a full home inspection. Is there like a pass fail?

Tracy Venturi: There is not there is no pass fail. So once you get the home inspection, typically in our market, you have the opportunity to ask the seller to make some repairs and that’s your second negotiation, right? The first negotiation is getting the house under contract. The second negotiation might be repairs. And typically, it’s mechanical, structural, danger safety kind of thing.

Tego Venturi: Warrantable, that’s what I use a lot it’s like you know, is it something in the home that can a warrantable buyer ask a seller to fix down this market. You know, they may have to waive that to get the home because it’s so competitive there’s buyers out there willing to waive. Do we need the inspection repairs.

Tracy Venturi: So, we might be willing to get their offer accepted waive any repair requests down the road.

Tego Venturi: And I want to make a caveat to that, I would never, ever recommend somebody get a waiver home inspection, you can always get the home inspection, that’s a part of our contracts. You never want to say, Well, you know, I want to get the home so I’m going to waive home inspections, No, get the home inspections, just make it clear that you’re not going to be picky about the repairs.

Tracy Venturi: You know there’s a lot of really handy people out there. And when we work with them and they say, “I can fix anything, I can fix that” or “I have the money. If something comes up on the Home Inspection, I can take care of it.” But then there are people who don’t save every penny they have they’re going to be putting in their downpayment, getting in that house. And for them you know getting a home warranty on top of their purchase or, you know, having the ability to ask for the repairs for the major things can be pretty important.