What to Expect and How to Prepare

When selling your home, both a home inspection and an appraisal are common parts of the process. These steps can significantly impact the sale, so it’s important to know what to expect and how to prepare.

Home Inspections

A home inspection is a thorough review of the property’s condition by a licensed inspector. The buyer typically hires the inspector as part of the due diligence process, but the findings can affect negotiations. Here’s what you need to know:

What to Expect in a Home Inspection

– Purpose: The inspection is meant to identify any issues with the home’s structure, systems, and overall condition, such as the roof, foundation, plumbing, electrical systems, and HVAC.

– Duration: A typical home inspection takes between 2-4 hours, depending on the size and condition of the property.

– Report: After the inspection, the inspector will provide a detailed report outlining any problems they find, from minor repairs to significant concerns. The buyer may use this report to request repairs or negotiate a lower price.

How to Prepare for a Home Inspection

– Tidy Up: Make sure your home is clean and easy to navigate. This includes clearing access to key areas like the attic, basement, furnace, and water heater.

– Make Minor Repairs: Fix small, obvious issues before the inspection, such as leaky faucets, loose handrails, or broken light switches. Taking care of minor repairs can create a positive impression and minimize potential buyer concerns.

– Provide Documentation: If you’ve made any major repairs or upgrades, provide documentation for the inspector to review. This includes warranties or receipts for recent roof replacements, HVAC installations, or plumbing work.

– Ensure Utilities Are On: Make sure all utilities—electricity, water, and gas—are turned on so the inspector can test systems like plumbing and electrical outlets.

Appraisals

An appraisal is an evaluation of your home’s market value, conducted by a licensed appraiser. Unlike the inspection, which focuses on the home’s condition, the appraisal assesses its fair market value based on comparable properties. Lenders require an appraisal to ensure the home is worth the loan amount being requested by the buyer.

What to Expect in an Appraisal

– Purpose: The appraiser’s goal is to determine whether the home’s sale price is fair based on its condition, location, and comparable home sales in the area.

– Duration: An appraisal usually takes about 30 minutes to an hour. The appraiser will tour the home and review key features like square footage, number of bedrooms and bathrooms, condition of the home, and any upgrades or renovations.

– Report: The appraiser will provide a report to the buyer’s lender, which will include an estimated value of the home based on comparable sales (known as “comps”) in your area.

How to Prepare for an Appraisal

– Boost Curb Appeal: Since first impressions matter, make sure your home’s exterior looks inviting. Mow the lawn, trim bushes, clean up any debris, and touch up paint if needed. This can subtly influence the appraiser’s perception of the home.

– Highlight Upgrades: Provide a list of any major upgrades or renovations, such as a remodeled kitchen, new roof, or energy-efficient windows. Highlighting these improvements can help increase the appraised value.

– Ensure a Clean and Well-Maintained Interior: While the appraiser is primarily focused on structural value and comparable homes, a clean, well-maintained interior can leave a positive impression. Make sure everything is in working order and presentable.

– Provide Access to All Areas: Similar to an inspection, ensure the appraiser can access all parts of your home, including the attic, basement, and any additional structures like a garage or shed.

What Happens After the Inspection and Appraisal?

After the Home Inspection

– Negotiations: If the inspection reveals significant issues, the buyer may request repairs or a price reduction. You’ll need to decide how to respond—whether you’ll agree to make repairs, offer a credit, or stand firm on your price.

– Repairs: If you agree to make repairs, they must be completed before closing. It’s essential to keep detailed records of any repairs you make, including receipts and warranties, to provide proof of completion.

After the Appraisal

– Appraisal Meets or Exceeds Sale Price: If the appraised value meets or exceeds the agreed-upon sale price, the transaction can proceed without issue.

– Appraisal Comes in Low: If the appraisal comes in lower than the sale price, the buyer’s lender may not approve the full loan amount. This could result in the buyer requesting a lower price or additional negotiations. In some cases, the buyer may need to bring more cash to the table to cover the difference.

By preparing for both the inspection and the appraisal, you can avoid potential setbacks and help ensure a smooth path to closing. Working with your real estate agent to address any concerns quickly can help keep the sale on track and maximize the value of your home.