Each evaluation serves a distinct purpose and ideally homebuyers get both.

Two items show up on nearly every homebuyer’s to-do list: an inspection and an appraisal. Here’s a quick overview of each, how much they cost and who pays for them.

Home inspections determine a home’s condition

A home inspector evaluates the condition of a home and all its systems. They assess the plumbing, electrical system, foundation, framing, roof and more. They’ll call out any water damage or visible mold. Additionally, they’ll look for environmental factors such as flooding or buried fuel tanks that could affect use of the property.

If a home inspector finds one or more significant defects, buyers could use this information to negotiate a lower price or decide to walk away from the deal.

Expect a home inspection to cost $350 to $500. The price could be higher for very large homes or properties with additional buildings.

Sometimes, such as in a competitive seller’s market, buyers skip a home inspection. While sellers love when this happen, it puts the buyer at greater risk because they could be buying problems. We recommend that all homebuyers get a home inspection.

In addition to a building inspection, there may be a professional check for pests like rodents or insects. Pest inspections are done by pest control service providers at an average cost of $125.

Home appraisals put a value on the home

A home appraisals are done by licensed professionals who determine a home’s market value. The figure they arrive at is determined by the homes’ features, conditions, construction materials and location as well as the recent selling prices of comparable homes nearby. The appraiser will prepare a report showing the home’s fair market value and the information that value is based upon.

The cost of home appraisals for single-family homes in Michigan is around $625.

Who pays for home inspections and appraisals?

While sellers may provide an inspection report, homebuyers should get their own inspection as the seller’s report may be biased.

Paying for a home inspection may feel like an added burden for buyers but it’s worth the cost because you’ll know more about any needed repairs. If the cost of repairs is too high and your offer is contingent on a satisfactory inspection, you’ll have an opportunity to walk away from the deal.

Buyers also pay for appraisals. If you’re paying all-cash, an appraisal isn’t necessary but it’s advisable to avoid overpaying for a property. Lenders will always require a home appraisal and typically bundle the fee in the closing costs.

Pest inspections may be paid for by either the seller or the buyer; it depends on what each agreed to in the purchase agreement.

We have answers to your mortgage questions

Our mortgage toolkit is a great resource for learning more about the process of buying a home. If you prefer to talk to a person, reach out to one of our mortgage loan officers online or call us at 800.991.2221 with your home loan questions.

 

 All loans subject to approval. Rates, terms, and conditions are subject to change may vary based on credit worthiness, qualifications and collateral conditions.