For Real Estate Investors, having an After Repaired Appraisal is a key component in the investors analysis of the investment. But it must be used with this other extremely and overlooked report to better determine the offer price to the seller.
Get a Home Inspection it plays a vital role in your analysis...
Appraisals vs Home Inspection Report
The main difference between an appraisal and an inspection is that an appraisal deals with the value of a home, while an inspection deals with the condition of the home. An appraisal will not uncover any deficiencies in the structure of the house or the homes systems. A home inspection dives deeper into the condition of the specific home. A licensed home inspector will spend multiple hours doing a comprehensive review of the home’s condition, both visually and by testing functionality of major systems. After completing the inspection, they will provide recommendations to the buyer on items in the home that should be repaired or replaced. A home inspection costs between $300 to $500 for a single family and up to $700 for a multi-family. This report is very important for two reasons.
1. It will give you a complete report on the condition and what needs to be repaired or replaced. You can use this to develop your Scope of Work, which you can give to your contractors to get a complete estimate.
2. It will alert you to any major problems not visible to the untrained eye. Then you can use that report to reduce the purchase price if you did not figure that item in your assessment of the house. Or, pass on the deal. There are seven major issues that home inspectors look for:
Structural Issues The major structural components of a house are the Roof, Framing and Foundation
Water Damage Water damage may result in structural faults and safety hazards in the home, such as unsound and bowing foundation walls and mold growth
Electrical Issues Damaged or Inadequate and dangerous Electrical System
Plumbing Problems Old detraining heating and water pipes and broken sewer lines
Insect and Pest Infestation Effecting the main structure of the house ie; main beam, sill plates, framing
Issues with the HVAC System Properly installed, age and efficiency of the system
Radon When you breathe air containing radon, you increase your risk of getting lung cancer. In fact, the Surgeon General of the United States has warned that radon is the second leading cause of lung cancer in the United States today.
And never forget to get these inspections as well so you don’t have any surprises after you purchase the house:
Scan the property for any underground oil tanks, cesspools or septic tanks.
These must be removed and oil tanks can be extremely expensive if they are leaking oil into the ground and need to be remediated. Remediation can cost $2,000 to $100,000!