Do I Still Need an Inspection if I Have an Appraisal?
Anytime you buy a home with an FHA or VA loan you will need to go through the appraisal process before your loan can be processed.
Because these are government-backed loans, a system is in place for the lender to protect their interests before processing the loan. It is important to know that even if your loan requires an FHA or VA appraisal, this is very different than a home inspection.
THE DIFFERENCE BETWEEN APPRAISALS & INSPECTION
An appraisal for a conventional loan is ordered by your lender and will indicate the value of the home. FHA or VA appraisers are required to review the condition of a home in addition to the value. The purpose of an FHA appraisal is to review the health, safety and future marketability of the home in order to protect the lender’s purposes, not the homeowners.
The report from the appraisal will indicate the general condition of the house (average, good, very good, new) and required repairs, but it will not break down the report into specific areas. It will not provide details on the condition of the roof, siding, foundation and more. (Unlike our home inspection report.) In addition, the FHA or VA appraisal may not catch important details, for instance, wood decay. To sell a home, wood decay could be painted over and covered up, however a proper home inspection will test the wood and uncover the rot.
WHAT IS THE FHA & VA LOAN APPRAISER REVIEWING?
The FHA/VA appraiser will typically be looking at the size of the home, number of bedroom/bathrooms and general home updates.
In addition, the FHA or VA appraisal will evaluate the roof (although they very rarely get on the roof to inspect), soil contamination, grading & drainage issues, water supply issues, private road access, chipped or peeling paint, attic insulation, foundation issues, mechanical or structural problems and safety hazards. They typically want to see railings near stairways, no signs of termites and any health or safety concerns addressed.
It is important to know that appraisal requirements must be fixed prior to closing. Unlike our home inspections, there will not be any communication to the buyer from the appraiser in regards to education on the home. In order for the buyer to understand the required fixes and how to properly maintain the home, a home inspection is needed.
WHY DO I STILL NEED A HOME INSPECTION WITH AN FHA OR VA APPRAISAL?
A home inspection protects the interests of the buyers and appraisals protect the interests of the lenders.
A home inspection is not performed to determine future marketability, instead it is designed to protect the safety and financial investment of each homeowner. As home inspectors, we give the good, bad and ugly when it comes to the home.
We offer a thorough, objective, hands-on tour through each home from the top of the roof to the bottom of the basement. We get in the attic, we get on the roof, and we indicate any areas of concern.
An appraiser is typically at a home for 30 minutes to review the home. As inspectors, we typically take 3 hours or more to carefully go through each home. We look at all structural and mechanical systems of the home and provide a detailed report to the buyer.
We never recommend buying a home without a home inspection, even if an FHA or VA appraisal is ordered. Protect your health, your safety and your investment. Get a home inspection.