Do You Need Both a Home Inspection and an Appraisal When Buying a Home?

Home Blog Do You Need Both a Home Inspection and an Appraisal When Buying a Home?

Posted On: September 23, 2024 by Peoples Bank of Kankakee County in: Home Mortgages

When purchasing a home, you want to ensure that the property is not only worth the price you're paying but also free from any major issues that could turn your dream home into a nightmare.

To protect your investment, it's essential to understand the roles of both a home inspection and an appraisal, and why having both can offer you peace of mind as you move forward with one of the most significant purchases of your life.

What Is the Difference Between a Home Inspection and an Appraisal?

While both a home inspection and an appraisal are designed to protect you, they serve different purposes and offer distinct benefits during the home-buying process.

Home Inspection

A home inspection is a detailed examination of the property's condition. Conducted by a professional home inspector, this process involves a thorough evaluation of the major systems, appliances, and structural components of the house. The inspector will check everything from the roof to the foundation, including plumbing, electrical systems, heating and cooling systems, and more. They will also look for signs of damage, such as dry rot, termite infestations, or water leaks.

The goal of a home inspection is to uncover any potential problems or defects that might not be immediately apparent. By attending the inspection, you can gain valuable insights into the condition of the home, learn about necessary maintenance, and ask questions directly to the inspector.

Appraisal

An appraisal, on the other hand, is an assessment of the property's market value. This process is usually required by lenders to ensure that the home is worth the amount of money being borrowed. An appraiser will evaluate the property's overall condition and compare it to similar homes in the area that have recently sold.

While appraisers do make note of obvious issues such as termite damage, dry rot, or a leaky roof, they are not trained to inspect the property as thoroughly as a home inspector. Their focus is primarily on determining the home's value in the current real estate market.

Why You Need Both

It's important to understand that an appraisal is not a substitute for a home inspection, and vice versa. Each serves a unique purpose:

Home Inspection: Helps identify potential problems with the property that could require costly repairs or maintenance. It gives you the opportunity to address any concerns with the seller before finalizing the purchase.

Appraisal: Protects you and your lender by ensuring that the home is worth the price you're paying. It helps prevent overpaying for a property and ensures that your investment is sound.

By relying on both a home inspection and an appraisal, you can confirm that you've found the perfect home and that you're making a wise financial decision.

How to Make the Most of Your Home Inspection

When scheduling a home inspection, it's a good idea to accompany the inspector during the process. This gives you the chance to learn about the home's major systems and fixtures, understand maintenance schedules, and ask any questions you may have about the property's condition.

Being present during the inspection also allows you to see firsthand any issues the inspector identifies. This knowledge can be invaluable when negotiating repairs with the seller or planning future maintenance.

Conclusion

Purchasing a home is a significant investment, and it's crucial to protect yourself from potential pitfalls. By conducting both a home inspection and an appraisal, you can ensure that your new home is both structurally sound and fairly priced. At Peoples Bank, we're here to help you navigate the home-buying process with confidence! Whether you're a first-time homebuyer or a seasoned homeowner, our mortgage experts are ready to assist you every step of the way.

Contact Peoples Bank today to learn more about our mortgage services and how we can help you secure the home of your dreams!

An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway. We can cover your overdrafts in two different ways:

We have standard overdraft practices that are available after your account has been open for 30 days and as long as you maintain your account in good standing.
We also offer an overdraft protection plan, Overdraft Protection Sweep, a link to a savings account. It may be less expensive than our standard overdraft practices. To learn more, ask us about this plan.

This notice explains our standard overdraft practices.

What are the standard overdraft practices that come with my account?

After your account has been open for 30 days and as long as you maintain your account in good standing, we do authorize and pay overdrafts for the following types of transactions:

Checks and other transactions made using your checking account number
Automatic bill payments

We do not authorize and pay overdrafts for the following types of transactions unless you ask us to (see below):

ATM transactions
Everyday debit card transactions

We pay overdrafts at our discretion, which means we do not guarantee that we will always authorize and pay any type of transaction.

If we do not authorize and pay an overdraft, your transaction will be declined.

What fees will I be charged if Peoples Bank of Kankakee County pays my overdraft?

Under our standard overdraft practices:

We will charge you a fee of up to $30 each time we pay an overdraft.
The maximum daily overdraft fee per presentment or item paid using the Overdraft Reserve Program is $150.00 per day.
No per item handling fee will be charged on de minimis overdrafts. De minimis overdraft for this policy means transactions that overdraw your account by $30 or less.
There is an overdraft fee of $5 per day that will be charged beginning the 4th consecutive business day your account is overdrawn.

Nonsufficient funds (NSF) fees - if an item drafted by you (such as a check) or a transaction you set up (such as a preauthorized transfer) is presented for payment in an amount that is more than the amount of money in your account and we decide not to pay the item or transaction, you agree that we can charge you an NSF fee for returning the payment. Be aware that such an item or payment may be presented multiple times by the merchant or other payee until it is paid, and that we do not monitor or control the number of times a transaction is presented for payment. You agree that we may charge you an NSF fee each time a payment is presented if the amount of money in your account is not sufficient to cover the payment, regardless of the number of times the payment is presented.

PAYMENT ORDER OF ITEMS - The law permits us to pay items drawn on your account in any order (for purposes of this section "items" means checks, orders and electronic transactions). To assist you in handling your account with us, we are providing you with the following information regarding how we process those items. When processing checks and orders drawn on your account our policy is to pay lower numbered checks and orders in numerical sequence, but electronic transactions are paid first in the order received. The order in which items are paid is important if there is not enough money in your account to pay all of the items that are presented. There is no policy that is favorable in every instance. If the smallest items are paid first, you may have fewer NSF or overdraft fees, but the largest, and perhaps more important items (such as rent or mortgage payments) might not be paid. However, if the largest items are paid first, your most important items might be paid but it may increase the overdraft or NSF fees if funds are not available to pay all of the items. We think our policy attains a reasonable balance between minimizing additional costs to you and paying your more important items. We encourage you to make careful records and practice good account management. This will help you to avoid creating items without sufficient funds and incurring the resulting fees.

What if I want Peoples Bank of Kankakee County to authorize and pay overdrafts on my ATM and everyday debit card transactions?

If you also want us to authorize and pay overdrafts on ATM and everyday debit card transactions after your account has been open for 30 days, you may opt in.

You have an ongoing right to change this consent at any time. If your overdraft privilege has been revoked for any reason, the opt-in or opt-out selection may not apply. Please contact your nearest office for more information.

Alternate ways to Opt In/Out or make changes:

By Phone. Our Customer Care Representatives can be reached at 815-936-7600.
By Mail. Peoples Bank of Kankakee County, 333 E. Court Street, Kankakee, IL 60901
In Person. Please visit your local office and ask a representative to help you decide which plan is best for you.