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Should the house inspection be done before of after the bank's appraisal?

We have placed an offer to buy our first home.  Should we have it inspected before or after the bank's appraisal?  Since the inspection fee is not refundable we would like
to have it appraised first, but our realtor is insisting that we do it now.
  • December 20 2012 - US
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Answers (12)

To my buyers that choose to get an inspection done I tell them to do it the same/next day we have our offer accepted because a home inspection is MUCH cheaper than an appraisal--typically.

The home inspection will give you an idea of what is wrong with the property, and should supply you with enough ammunition to provide the appraiser (yes you can give your home inspection to the appraiser, and yes, in every case in my persona career everything in that inspection has played a role in the appraiser's eye when it comes to value, needed repairs, etc) with some useful information to give the home a more accurate value.  Also you might realize you don't want the house in light of the inspection and walk away saving on the appraisal monies--ie tell your lender to order it after you get your home inspection done the same/next day.

Best wishes from So-Cal and good luck
  • December 21 2012
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In your contract is a timeline within which you need to perform inspection and negoatiate any repairs, credits etc. With acceptance of the offer by both parties your clock ticks. I would inspect asap. Your agent is right. If you run out of time with the inspection you accept the house as is. And for the appraisal: your agent probably gave you a market analysis before you offered. That should insure that your offer is a market price and that an appraisal has a good chance to come back at value.
  • December 21 2012
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Keep in mind, appraisers take forever to inspect the home, inspections not so much.

BUT what Im seeing in THIS market is buyers having the inspections right away, and the appraisers as close to closing as possible to capture uptrending high sales to 'bring in' the appraisals.

As mentioned before, do you due diligence...

  • December 21 2012
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Profile picture for hpvanc
Buyers back out for both low appraisals and inspections issues.  I think you need to do some due diligence in your decision on which to do 1st.  If your bidding top dollar you may want do as an extensive of an inspection as you can do on your own before signing the purchase agreement then do the appraisal 1st, if you are buying a distressed property at a low to middling price do the inspection 1st.  If you are buying a fixer at top dollar, flip a coin and cross your fingers.
  • December 21 2012
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Inspection is ordered as soon as we have a contract if you are my clients. You need to know right off if there are problems with the house, and if its' a big enough problem, you need time to fix it so that it does appraise.  Leaky roof comes to mind.
  • December 21 2012
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In my opinion and experience I would do the inspection first. I had buyers back out of the deal due to inspections problems. Its a catch 22- do you lose the inspection fee or the appraisal fee. Our lenders do not specify which gets done first.
  • December 21 2012
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Profile picture for Ofe Polack
It all depends what you wrote on your offer?
  • December 20 2012
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Profile picture for craigfial
Generally your contract will state how long you have for inspections.  It's a risk you take.  You want to know any defects before ordering the appraisal.
If the appraisal comes in lower than contract price, you can try to re-negotiate the price/terms.

Contracts all have Contingency DEADLINES.  Make sure you understand when contingencies expire and act accordingly.
  • December 20 2012
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It's entirely dependent on your contract and your lender. The lender is the one who orders the appraisal and often they can't them done prior to the inspection contingency. In most cases, we write offers with 10-15 day inspection contingencies, and 25-45 day appraisal contingencies. 

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  • December 20 2012
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Every situation can be different. Are you hoping to get the appraisal back and then inspect? How long is your inspection contingency period?
  • December 20 2012
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The whole point of inspections are to determine the condition of the property.  You want to know right away if there is something wrong with the property that no one may be aware of. Having said that, be sure and check your contract to see how long you have to do inspections and apprisials, so you get both done on time.

Good luck form San Diego, CA  DRE 01135464

  • December 20 2012
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Profile picture for ddausilio1

Customs are different dependent on where you live.  In my market we always suggest that the inspection be completed as soon as possible. I tell my buyers that the process is like running the bases.  Inspection passes you just passed first base...Appraisal is completed and you rounded second base... Mortgage approved and you flew by 3rd base...  Closing your new home is home plate...

In closing... if your agent believes the home will appraise out based on similar sales...  go ahead and do the inspection...  If your agent feels there may be a problem with the appraisal then perhaps you overpaid for the house!

Good luck ...

  • December 20 2012
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