8. Inspections and Appraisals

Have the home inspected by a professional, bonded inspector. (NOTE: The buyer normally pays for the home inspection - it will run somewhere in the area of $200 - $500.) The home inspection usually takes place within ten days after signing the contract. If there are any major flaws in the home, they can be dealt with before you apply for the mortgage. If these issues cannot be dealt with to the satisfaction of the buyer, your contract should allow you to back out at this time.

What does a home inspector do?

For your own safety, and to make sure you're getting your money's worth in the home you choose, using a professional home inspector is highly recommended. A home inspector will check a home's plumbing, heating and cooling, electrical systems, and look for structural problems. We have several inspectors to recommend if you don't already have one in mind.

Your home cannot "pass" or "fail" an inspection, and your inspector will not tell you whether he or she thinks the home is worth the money you are offering. The inspector's job is to make you aware of repairs that are recommended or necessary. A seller may be willing to renegotiate a price to accommodate needed repairs, or you may decide that the home will take too much work and money. A professional inspection will help you make a clear-headed decision.

In choosing a home inspector, consider one that has been certified as a qualified and experienced member by a trade association. Your real estate agent may refer you to qualified inspectors in your area.

Should I be present during the inspection?

Yes. It's not required, but it is very much to your advantage. You'll be able to clearly understand the inspection report, and know exactly which areas need attention. Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you when you move into your new home. Most important, you'll see the home through the eyes of an objective third party.

Are there any other inspections I need to have done?

In addition to the overall inspection, you may wish to have separate tests conducted to check for termites, or the presence of radon gas. Sometimes an inspector will recommend further evaluation by a specialist, such as a structural engineer or environmental specialist.

What is an appraisal?

An appraisal is a detailed, written estimate of the current market value of the home. It is performed by a licensed appraiser. Lenders will only make loans up to the appraised value of the home.

How does an appraisal contingency work?

If the appraised value is equal to or higher than the sales price, then there is no problem.

If the appraised value is less than the sales price, then one of several things can happen:

• The seller can lower the sales price to the appraised value.
• A new price can be negotiated.
• The buyer can cancel the contract.

Your agent will advise you on the details of this contingency.