An independent home inspection provides homeowners looking to buy or sell the property a snapshot of the dwelling’s condition prior to a potential purchase. Various factors play a role in the fair market value.
State of the structure
The structure itself that includes the overall condition and functionality, square footage/size of the lot, bedrooms, closets, upgrades, location, and the state of basements, crawl spaces, countertops, cabinets, fixtures, and outdoor amenities such as landscaping and driveways. In addition, the local market conditions, including sales of similar homes, also play a role.
Upon completion, the data is sent to the lender. Certain situations exist where the appraisal takes longer than expected or halts the process of securing a mortgage that includes:
- The sale price coming in lower than the appraised amount that may require an independent appraisal. While reconsideration exists in disputes, many cases see sellers having to reduce the cost or buyers providing a higher down payment. In those scenarios, homeowners run the risk of entering their new dwelling with negative equity.
- Property appraisals that focus on the home “as is” when an appraisal occurs. While sellers can promise to make necessary improvements or repairs, those steps will not increase the value. Any evidence of deferred maintenance will result in a mortgage company declining to fund the home. The most common is repairs to roofs that may require certification from an inspector to estimate how long the roof will hold up.
- The overall habitability of the home that may involve structural problems, with the most dangerous being foundation cracks. In addition to the home value plummeting, new homeowners can find themselves considered ineligible for mortgage loans. Fixing the problem is an option. However, the costs can range from five to six-figure range.
Whether you are a buyer or seller, attention to all the details is paramount in the home-buying process. The slightest oversight can carry the most catastrophic of consequences.