Douglas Tucker, Broker-Associate of RE / MAX Properties Unlimited in Morristown, NJ helps Randolph sellers and buyers understand the difference between an appraisal and a home inspection.
NJ Home Appraisals
A property appraisal in New Jersey is ordered by the lender to guarantee that the selling price of the property is in line with the amount of the buyer's mortgage. A home appraisal is included in the buyer's lender costs. If a buyer does not require a mortgage, he or she does not necessarily need a home appraisal. However, it would be prudent for the buyer to know the appraised value of the home so the price he or she pays is fair.
The US Department of Housing and Urban Development has information regarding appraisals. In essence, an appraisal is required to:
• Evaluate the market value of a home according to the properties that have sold within a three to six month period that are similar in size, style, and condition as the subject property; and
• Ensure that the house meets FHA standards and, if not, follow-up with the buyer, seller, and lender to make sure that the standards are met.
What part does a realtor play in an appraisal?
A NJ realtor can provide the appraiser comparables that may not be obvious to an appraiser out of the area. Appraisers extract their information from the multiple listing service and the tax records so oftentimes the realtor need not do anything other than open the door to let the appraiser inside.
Home Inspections in NJ
A home inspection, on the other hand, is ordered by the buyer and paid for by the buyer at the time of the home inspection. Home inspections have a few components – termite and wood destroying insect inspection, radon inspection, oil tank sweep, etc. Home inspections can range anywhere from $ 350- $ 700 or more depending on the areas being inspected and the property size.
The purpose of a home inspection is not so the buyer can demand repairs or improvements to the property. It should be for informational purposes and to help determine life expectancy of items like the furnace, hot water heater, central air, roof, etc. A home inspector can also provide valuable suggestions for the buyer regarding ways to increase home efficiency and save energy.
Does a realtor do anything in a home inspection?
A realtor in New Jersey should observe the inspection but not actively participate unless it is his or her house. It's the realtor's job to report to the attorney anything of concern to the buyer so this could be addressed during negotiations.