As you begin your real estate career, you’ll quickly learn that home inspections and appraisals are essential to helping your clients feel secure in purchasing a house. Although these tasks both assess a property, they serve different purposes. Use this guide to better understand how each benefits a sale.

Appraisal

If the buyer requires a mortgage, the lender will most likely require an appraisal before approving the loan amount. They’ll appoint a third-party appraiser to determine market value. The professional will walk through the house to visually assess its condition, comparing its location, square footage, and amenities to similar properties that were recently sold in the area.

The lender will use the results to determine the loan amount, which normally doesn’t exceed 97% of the appraised value. If the appraisal comes back lower than the offered price, you can help your client by renegotiating with the seller for a lower price. Ideally, you want the appraisal to come back higher than the listed price—this gives your client automatic equity and provides better refinancing options in the future.

Inspection

This thorough examination determines the property’s condition and uncovers any potential problems. An inspector will assess the interior and exterior of the home. While checklists vary, they typically include the foundation, siding, roof, attic, floors, windows, and doors, as well as the HVAC, electrical, and plumbing systems.

The buyer will be given an inspection report that details the results. Based on this information, your client can negotiate a lower price to cover the repairs or ask the seller to handle them before the purchase. A home inspection isn’t necessary to secure a mortgage, but it can help your clients feel at ease about moving forward with the purchase.

If you want your clients to receive quality home inspections, turn to Inspect Hawaii in Honolulu. These professionals provide thorough property exams and offer same-day reports. They’ll use drones and infrared cameras to assess every inch of the house and will revisit troubled spots within 90 days after the initial inspection. To get more information about their services, visit them online or call (808) 330-2302.