Do inspections come before appraisals?
A property we were interested in had an offer and then was back on the market. We guessed that the inspection found too many costly issues. An agent told us that the appraisal must have been met since the price stayed the same when back on the market. Wouldn't it be more common to wait until after the inspection for the bank appraisal because if the inspection results don't suit the buyer there is no need for a mortgage. Thanks.
In our particular case our bank will not give a mortgage on a property that is not livable. So we assume they have their own inspector. They once told us if there is a small hole in a wall no mortgage. We've seen the inside of the property in question and it meets their guidelines though there are other issues though it is quite liveble and has been by a 94 year old for the last 20 years.
- PLv 79 months agoFavorite Answer
Inspections always come first. Appraisals are initiated by the mortgage bank usually long after the inspection. Banks don't want to waste time and money on houses the buyers haven't completed their own inspection on. Agents are often full of it. Houses are never perfect and if you want a perfect house you will pay a large premium for it. Some buyers are fussier than others and some sellers will pay for fixes for others will refuse. At the end of the day the buyer just needs to decide if they can deal with what they are getting. You shouldn't assume the house is bad unless you know something very specific about it. You can always request a copy of the previous inspection report and ask the seller what happened. I've had buyers demand all kinds of unreasonable things after an inspection and told them take a hike and sold it to some more reasonable people 2 weeks later for a higher price.
- real estate guyLv 79 months ago
2 things. Both YOU and the agent assumed things without any proof.
The other deal could have fallen apart for many reasons. The inspection, the appraisal or more likely, the owner had cold feet or couldn't get a loan.
In regards to the appraisal, maybe it did come in lower then asking price and the seller and buyer couldn't agree as to what to do. Appraisals are NOT always correct.
To answer your questions, yes, you should have the inspections done first, then pay for the appraisal.
- 9 months ago
An appraisal actually protects the interest of the lender and an inspection protects the buyer from buying a maintainance headache.It is better to get the appraisal done first because if the home appraises below the asking price the bank will not provide a loan and the fee paid for the inspection and appraisal will go for a waste.
- realtor.sailorLv 79 months ago
Inspections are at a buyer's expense and the results are between the buyer and his/her agent. As far as the appraisal it probably wasn't done. For an agent to make the statement regarding the appraisal and being back on the market is not true. Most banks don't have their foreclosures inspected and all they know is the basic condition via photos. They don't make inspections because they don't want to know.
As far as financing have you checked FHA 203K. This gives you the funds to make it livable.Source(s): I sell bank owned homes.
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- MarkLv 69 months ago
After you make an offer and give an earnest money check, you begin the inspection period (unless you waive inspection). This is typically 7-11 days and is stated in the offer. If you don't respond within that period it is assumed that the inspection is accepted. It's on the buyer to schedule the inspection(s) and respond to the buyer when completed. The buyer must allow access to the home, but typically can refuse to allow inspectors on the roof for liability reasons.
After the buyer receives the inspection report(s) - plural as you could call in several inspectors (for example a pool expert). You respond to the sellers with either acceptance, cancellation of the contract, or a counter-offer asking for concessions based on the inspection(s).
At the same time, in parallel, you would have informed the mortgage broker that you made an offer and they would start their process. They may go ahead and schedule the appraisal and it may occur before the inspection period ends. This happened to us. We put a bid on a house, and it was appraised before the inspection was completed. We ended up cancelling the contract and were out $450 for the inspection fee.
- Steve MLv 49 months ago
We're just finishing the process and buying a new house in another state now. The buyer orders inspections and the appraisal. It's up to the buyer to decide when they are done. Yes, it's more common to wait and do the appraisal near the end but a good appraiser is primarily looking at the features the house offers and weighs that against what comparable homes in the area are selling for. He/she will catch major flaws.
BTW, getting your mortgage pre-approved (i.e., a letter from your lender saying they will give you a loan up to $XXX) makes the entire process much quicker and easier. Once you decide on a property all they have to do is fill in numbers.
- RangerLv 79 months ago
Two types of Appraisals are done. The listing realtor gives a realtor appraisal when the listing is made, before inspections. The realtor appraisal is nothing more than the realtor telling the seller what the realtor thinks the property will sell for.
Next the realtor list the property for a price that the owner wants. It may be the appraised price or it may be higher or lower than the realtor appraised price.
Someone makes an offer on the property contingent to the property Bank Appraisal being high enough to get a loan, and subject to passing an inspection of the property for defects.
If the seller accepts, Then both an inspection and appraisal by the bank will be done. Not necessarily one before the other.