Why NOT to Skip the Home Appraisal and Inspection When Buying in NJ
It’s tempting to cut corners in order to stand out in a crowded housing market. As a buyer in New Jersey, you want your offer to win out. You may think offering to waive the home appraisal or home inspection is a good way to propel you to the top of the list. However, this could cost you more later on. While it may be annoying to keep these steps, here are a few reasons to stick with them.
Skipping the appraisal could cause an appraisal gap.
The appraisal is a tool lenders use to fairly evaluate the value of the home before they lend you the money to purchase it. Appraisals are done by third parties and are unbiased. They let the bank know what is fair. However, because of bidding wars, which can drive up the sale price of a home, the home could end up selling for more than it was appraised for. This is called the appraisal gap.
This could cause you to pay more out of pocket.
When this gap happens, often sellers will require you to pay the extra that the bank won’t spring for out of your pocket. This could be hard for you to come up with last minute on top of a down payment. If you do the appraisal and find out ahead of time, it’ll save you from that situation.
Skipping the home inspection could lead you to miss defects and problems.
The home inspection is an evaluation of the home for problems and defects that you might not have been aware of at a showing. An independent, unbiased, third party also does this inspection. This is an important step because oftentimes the sellers’ themselves may not be aware of glaring issues. So it’s not necessarily that sellers are keeping information from you. But rather perhaps they didn’t realize how old the roof is or that the HVAC system is faulty. These are big and expensive problems to fix. Without the inspection, you might not know that these issues or others are going to fall into your hands sooner rather than later.
This could take away some of your negotiating power.
When you do take the time to do the home inspection, it can give you negotiating power with the sellers. Perhaps there is a red flag and the roof or foundation is not in the best shape. This knowledge allows you to push the price down in negotiations so you can save the extra to go towards repairs.
This could also lead to you paying more out of pocket down the road.
It makes sense, then, that if you forgo the inspection and don’t know about any problems, you might pay more later. Not knowing doesn’t mean there aren’t any issues. It just means if you pay full price and then the roof starts leaking three months in, you might be strapped for the cash to repair it.
These are just a few reasons NOT to skip the appraisal and inspection. And as always, I’m only a phone call away for any questions you may have while buying. Let’s make your real estate dreams a reality.
