When you think about the process of finally buying your dream home, you’re most likely going to be focused on “the big picture” of what it takes to secure your ideal property. It’s easy to dream big about your dream home – but it’s also important to remember the many steps and moving parts that go into making your real estate purchase a reality, including the appraisal and inspection.
Both the bank appraisal and the home inspection are important steps along the journey, helping move the real estate transaction forward and allowing buyers and sellers to make more informed decisions. During the real estate transaction process, people occasionally confuse or conflate these two processes – even though, in practice, they are quite different. The bank appraisal and the home inspection have entirely different goals, serve different parties, and use entirely different “toolkits” along the way.
In a nutshell? Whether you’re buying or selling, a professional home inspection is a non-invasive visual examination of a home’s accessible systems and components, intended to help you understand a home’s condition, habitability and safety. An appraisal, meanwhile, is a professional’s independent evaluation of the current market value of a property, based on the condition of the property, as well as local market conditions – that is, looking at similar properties in the area and the prices at which they were sold.
A home inspection is generally ordered by the buyer once under contract on the purchase of their new home (but before closing the purchase), or performed by the seller prior to listing a property. It is done to highlight safety or comfort issues that may need to be remedied, before or after the property changes hands. Meanwhile, the appraisal is done to serve the lender involved in financing the buyer’s purchase. This process is meant to help a lender determine how much it can loan to the buyer, in order to ensure that it is making a sound investment. Generally speaking, if a buyer is seeking financing, an appraisal is going to be necessary.
Here’s a more in-depth look at what goes into an appraisal and an inspection:
The Appraisal
Performed by a certified appraiser, an appraisal is meant to present an independent professional’s unbiased, objective evaluation of the current market value of a home. Generally speaking, the appraiser will look at the condition of the home, but, more importantly, they will also consider external market factors that might influence your home’s market value.
As a result, an appraisal may include researching recent sales information of similar properties, the current condition of the property (at a very broad level), and the home’s location. For recent sales figures (commonly called “comps”), the appraiser will typically consider properties located within a half-mile to a mile of the home (depending on your market), which have sold in the last 90-180 days. The appraiser is interested in properties that are similar to the home being sold, and will consider features like square footage, appearance, amenities, and property condition as they make their judgments.
An appraisers’ job is to set a market value of the home and report this information to the bank or mortgage lender, so that they can decide whether or not to move forward with issuing the loan. An appraiser is not evaluating the safety or condition of the home. If there are any major, conspicuous maintenance issues, the appraiser will take note of them, but it is not their responsibility to suggest remedies or highlight potential problems.
While the appraisal generally considers factors that are largely out of your control – square footage, lot size, number of bedrooms and bathrooms – there are several things you can do as a seller to help put your best foot forward, and maybe even improve the appraised value for your home. While cleaning messy rooms and dirty dishes may not have much of an impact, making a few minor repairs – such as patching up plaster cracks in walls, cleaning up soiled carpets, and ridding the place of pests – may help. Improving your property’s curb appeal may also “move the needle” without requiring a substantial investment, so you may want to take some time to update your landscaping and do minor projects, like fixing your garage doors.
Generally speaking, sellers pay for the appraisal on behalf of the buyer. Appraisals typically cost a few hundred dollars, and the process may take anywhere from three to ten business days.
The Inspection
A home inspection is a non-invasive visual examination and report on the overall condition of a home. A thorough home inspection may involve the inspector looking at more than 200 different elements around a property, including surveying the home’s structure, foundation, electrical and plumbing systems, and more.
A typical home inspection is performed to assess structural and mechanical concerns, look for potential safety hazards, and take note of the conditions of a home’s major systems and their respective components.
In most cases, the purpose of a home inspection is to help buyers and sellers move forward in their real estate transaction with confidence. For many people, a home is the greatest investment they’ll ever make, so having a home inspection is key in determining any issues that may need to be remedied before, during, or after a home is transferred. Depending on the results of a home inspection, buyers may opt to terminate their purchase agreement altogether. In other cases, the buyer may request that the seller make repairs, or else give them a credit to make repairs of their own down the line.
Every home is different, so inspections will vary, but in Chicago, the inspector typically spends between two to four hours evaluating a single family home, and frequently less than that for a condominium. At the end of the process, the inspector will issue a comprehensive report, supported by photos, and may recommend further examinations, depending on the issues they find.
What to Expect with Windy City Home Inspection
Whether you’re buying a property, selling a property, or just want to know how to maintain your property, Windy City Home Inspection has an inspection for you. With Windy City Home Inspection, you can expect a thorough, diligent inspection that never cuts corners and always makes sure your structure is sound and up to date.
When searching for the right home inspector, it’s important to find someone you can trust — and that’s why we are here for you. The inspectors at Windy City Home Inspection, Inc. are licensed by the State of Illinois, certified, and insured. Each home inspection is backed by our Warranty and Protection Plan. Furthermore, we pride ourselves on our superior customer service. If you ever have questions, even years after your home inspection, we will be here to answer them — even if it means returning to your home.
At Windy City Home Inspection, Inc., we perform inspections to the highest standards – yours. Backed by a consulting team with more than 60 years of experience, Windy City Home Inspection is committed to excellence. Have a question? Let us help.
