Inspectors can also check for mold growth and other potential health and environmental issues within the home, such as asbestos and lead. Always order your own inspection, even if a recent one has been conducted and the seller shows you the official report. You need to do your due diligence in case the inspection reveals a major issue that could change the conditions of the sale — or even persuade you to walk away from the sale (Chapter 12). The presence of any kind of contamination is reason enough to demand a renegotiation of terms, or to rethink the deal completely. The same goes for any major repair that needs to be made, or issues with the structural integrity of the property.
Step 6: Order a Home Appraisal
Home appraisals are not the same as home inspections, though they are often confused. A home appraisal determines the estimated market value of what is soon to be your property; the inspection, on the other hand, determines the condition. The appraiser calculates value based on general condition, geographic location, proximity to objects of interest, value of nearby houses, recent sales, and neighborhood growth and potential for growth, among other factors. Mortgage lenders use this information to ensure the amount you borrow is supported by the home’s value. There is always a risk of a low appraisal, though, in which case the lender won’t go through with the transaction at a price based on a higher presumed value. The seller may or may not adjust the sale price accordingly. Appraisal value is not a binding figure, as the seller and buyer together determine the sale price in the end, after negotiations.
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