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MARY MONDAY

Mary Monday: Appraisals and inspections and their functions

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An appraisal and a home inspection have some similarities, but they are two distinct functions in a real estate transaction.

The services provided by an appraiser and a home inspector ensure that your property meets certain basic criteria. The appraisal assures the market value for the buyer and the lender, and the home inspection focuses on the physical elements of the property and doesn't consider the value.

An appraisal is usually ordered and required by a lender to estimate the value of a property to ensure that the house is worth what the buyer is paying for it and that it is marketable in the event the buyer defaults on the loan. An appraisal considers the age of the home, its condition, floor plan, amenities, square footage, the size of the lot, improvements, location and the recent sales of any comparable homes.

The home inspection identifies items that need to be repaired or replaced, and estimates the useful life of major systems, equipment and the structure itself. The inspection doesn't comment on or ascertain cosmetic imperfections, nor does it assign a value to the property or any of its elements. A home inspection does not include a termite, radon or mold inspection. These inspections, however, may be ordered by the buyer and in some cases can be accomplished by the home inspector.

Most buyers will have a home inspected after escrow is opened and will ask the seller to correct those deficiencies that they feel important before closing. Sellers can avoid having numerous items showing up on the inspection report if they take care of known defects before the inspection.

Having a professional home inspection before you list your property can give you an unbiased evaluation of its physical condition, and clue you in as to recommended repairs and necessary updates. By tending to these matters before your home goes on the market you can avoid problems, disputes and/or delays later. If your home is pre-inspected, the buyer may want to order and pay for an additional inspection -- which is the buyer's privilege.

Your real estate professional can help you decide if an appraisal or home inspection would be helpful before you list your property.

Mary Monday is an associate broker at RE/MAX Fine Properties. She can be contacted at: (928) 853-0572, Mary@MaryMonday.com or www.MaryMonday.com.

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