The Home Inspection and Appraisal

One of the most important responsibilities I have is educating my clients on the inspection and appraisal process, because both can significantly impact the outcome of a real estate transaction. Let’s break it down clearly:

Home Inspection: Understanding Its Role – The inspection is typically performed shortly after the buyer goes under contract, during the option period (especially in Texas using the TREC contract).

The Purpose of the Home Inspection:

To identify the condition of the property — especially major systems like foundation, roof, HVAC, plumbing, and electrical.
To uncover safety issues, code violations, or deferred maintenance.

What Happens:

A licensed inspector thoroughly evaluates the home and provides a detailed report.
Buyer then decides whether to: Proceed as-is, Negotiate repairs or seller concessions, Terminate the contract (if within the option period)

Common Outcomes That Affect the Deal:

Major repair issues (e.g., foundation, roof, mold) can lead to: Renegotiation of price or repair terms, Buyer walking away if concerns are too costly or seller is unwilling to negotiate
Sellers unprepared for inspection feedback may feel surprised or defensive, which can stall negotiations

Home Appraisal: Understanding Its Role- The appraisal is ordered by the buyer’s lender to ensure the property is worth the agreed-upon purchase price before funding the loan.

Purpose: To protect the lender from lending more than the home is worth, To ensure the buyer isn’t overpaying

What Happens: A licensed appraiser evaluates the property and compares it to recent sales (comps). They generate a report with a market value for the property.

Common Outcomes That Affect the Deal:

Appraisal Meets or Exceeds Sales Price: Great — the loan moves forward smoothly.

Appraisal Comes in Low: This is a problem and can cause delays or kill the deal. Buyer and seller must resolve the gap by:

Seller reducing price
Buyer bringing more cash
Negotiating a combination of both
Exercising a termination clause (if contract includes an appraisal contingency)

As the Realtor: Prepare comps ahead of time to justify value and even provide a packet to the appraiser. If it comes in low, help your seller understand their options quickly.

Do you have questions about the Inspection or Appraisal?

Let’s Chat about your options or questions…

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