BUY YOUR FIRST HOME IN 8 STEPS: Step 7

Buy Your First Home in 8 Steps

A Guide for First-Time Homebuyers

Buying a home is one of the biggest decisions you will make in your lifetime! It can be stressful, overwhelming, emotional and exhausting. I believe with the right tools and education, you will feel confident and empowered to pursue your Real Estate dreams.

As a Realtor®, I am committed to helping first-time homebuyers confidently navigate the homebuying process.

Part of securing the financing on your loan is the Inspection & Appraisal processes. Both are required for financing of a home.

Having the Inspection protects the buyer by determining if the home is in good condition and healthy to live in. The Appraisal determines the home's value and prevents overpaying for a home.

Inspection
A Home Inspection is used to give information about the home's condition and help the buyer make an informed decision. An inspection is an additional cost to the buyer and generally are $300-$600 dollars but depend on the size of home.

Inspectors examine deep inside the home. They look at the foundation, roof, electrical systems, plumbing, crawlspace, attic, all appliances, etc. Inspectors do a thorough investigation and will call out anything and determine if it is minor, moderate, or major on the repair scale. They will provide all findings in a report for you to go over with your Realtor. Skipping this step could cost you a lot of money down the road.

The standard ‘Inspection Period’ in Oregon is 10 business days. This is the timeframe in which the inspection needs to happen, and the buyer makes their decision on how they would like to proceed.

Buyers can either continue with the purchase, terminate the contract, or negotiate the repairs or price of the home. Your Realtor will help you navigate the appropriate route for your particular situation.

Appraisal

An Appraisal is an opinion of value by a licensed appraiser hired by the mortgage company. An appraisal is an additional cost to the buyer and generally costs upwards of $800-$1,000 dollars, depending on size of home.

Appraisals are required for financing a home. The appraisals determine if the home is worth what you are planning to pay. The house serves as collateral for the bank if you default on your mortgage. They will foreclose on your home and resell it to recoup the costs.

Appraisers look at the condition and size of the home, number of bedrooms and bathrooms, updates/renovations, etc. They compare the home to other similar homes that recently have sold in the same neighborhood.

Appraisals are meant to protect the lender and you the buyer from a bad purchase. No one wants to pay more than something is worth right?

What Happens if the Appraisal is Low?

If the appraisal comes in lower than what you offered to pay for the home, the lender will not lend you the extra money. This means you will either have to pay cash to make up the difference, ask the sellers to lower the price, or terminate the contract.

My Tips

Do not skip the inspection. Having a good inspector will save you a lot of money down the road.

Appraisers are to remain neutral and unbiased.

Lenders are required to provide you with a copy of the appraisal.

It is so important to have a Real Estate Agent or Realtor® help you navigate the homebuying process and keep you on schedule.