Trying to buy a house is a process rife with expenses and complications. There are meetings to schedule and standards that the property has to meet. The idea that you need to bring in multiple outside professionals to look over a property that you have already walked through with a licensed real estate agent may seem unnecessary.
If your agent suggested an appraisal and an inspection, you might prefer to keep your costs lower by only having one of the two done at the property. As a home buyer, is the appraisal or the inspection more important?
Lenders typically demand appraisals
An appraisal largely exists to protect lenders from overextending themselves when financing a purchase. They need a professional to verify that the property is worth the amount that they intend to finance for the purchase.
As a homeowner, the appraisal may be less important to you than an inspection. Lenders often require inspections as well, although these can protect buyers just as much as lenders. An inspection can help you locate issues with the property that you didn’t notice and the seller didn’t disclose. You can then use those issues as leverage if you request that the seller make repairs to the property before moving out or reduce the sale price to reflect those unexpected additional expenses.
It is worth noting that in a market with low supply and high demand, price increases may not reflect what is sustainable in the long term. Even those making a cash real estate purchase could benefit from an appraisal in a market with inflated prices. Learning more about the tools that help protect you during a residential real estate purchase will reduce your risk during the transaction.