Which comes first? The home inspection or the appraisal?

By
Real Estate Agent with Dominion Real Estate Partners, LLC, Scottsdale, AZ SA582226000

Finally, we found the home my buyers want to buy in north Scottsdale.  It's an REO and we went back and forth in the negotiation of the price with the bank.  We get the "verbal" approval today with the "promise" of bank instructions in 24-48 hours from the listing agent.  So, we get prepared to go into full gear.

 

I provided a list of 3 reputable home inspectors for our Scottsdale area to the buyers.  But, as usual, they had gone on line and found an inspector who actually lives in the subdivision.  The inspector told my buyers they really needed to get the appraisal done first because "he knows" the subdivision and doesn't think the home will appraise.  After all, he had just tried to refinance his own home in this subdivision and it didn't appraise high enough for his refinance.  He LIED and told my buyer his home was over 3600 SF and it "only" appraised at $600,000.  There was no way my buyer's home at 2600 SF would appraise for the purchase price of $500,000 despite the fact that two homes sold in the last 3 months at the $500,000 mark. 

So, the question has come up - what do you do first?  The appraisal or the inspection?  

My response - use only REPUTABLE home inspectors who don't over step their area of knowledge. 

 

My resolution - I will meet with this " licensed" home inspector on Sunday with the tax print out of the size of his home.  I will ask him how he could lie to my buyers about values in the area and I will tell him to stick to what he is licensed to do - inspect the home for faults, DO NOT give out values you know nothing about.

So, which do you do?  The appraisal or the home inspection?  Me -  I want my buyers to know they are in a sound home with most things functioning as they should.  The value has already been shown by the recently sold comps, although the appraiser will always have the last say.  But, PLEASE, don't overstep YOUR area of expertise.  I can't check wiring and A/C - please don't check values.  



 

 

Posted by

Juli Vosmik

Dominion Real Estate Partners, LLC

480-710-0739

 

 Scottsdale and Cave Creek Real Estate

 

 

Helping you make informed decisions whether buying or selling homes in Scottsdale, Cave Creek and north Phoenix Arizona.  I know the area - I live here.

 

A portion of all sales is donated to the various animal rescue and humane societies.

 

AZ license SA582226000

 

 

 

 
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Ambassador
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Doug Rogers
Bayou Properties Realty - Pineville, LA
Your Pineville Louisiana Agent

Inspection first, once we negotiate repairs or reduction then the mortgage company orders the appraisal. Would hate to pay for the appraisal only to have the deal die due to repairs.

Aug 03, 2012 07:27 AM #15
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Karen Kruschka
RE/MAX Ultimate - Manassas, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Juli  I would ask the inspector to tell your buyers how many years professional appraiising experience that qualifies him to give opinions about home values

Aug 03, 2012 11:44 AM #16
Rainmaker
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Joshua Zargari
MJ Decorators Workshop LI staging and home decorating - Lynbrook, NY
MJ Decorators Workshop

Happy Friday Juli.

Nothing to add to the above comments.

Have a nice weekend.

Aug 03, 2012 02:27 PM #17
Rainmaker
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Donna Foerster
Cherry Creek Properties, LLC - Parker, CO
Metro Denver Real Estate Agent

Juli~ We do the inspection first.  If it turns out that the issues with the inspection cannot be worked out, the appraisal doesn't really matter.  Of course, I guess you could argue it the other way around too.  That inspector was WAY out of bounds.  Wonder why he felt he needed to share that information. 

Aug 03, 2012 05:17 PM #18
Rainmaker
225,303
Pamela Smith
Long Realty West Valley - Sun City West, AZ
Sun City West, Corte Bella, Sun City Grand

Juli,

I agree with you that he stepped way over his edge of expertise.

Aug 04, 2012 07:43 AM #19
Rainer
135,576
Debora Nichols
Residential Sales, Purchases, Investors, Vacation Homes - Phoenix, AZ
Realtor Anthem,Phoenix,Scottsdale,Glendale,Peoria

Wow,  I totally agree.  He/she needs to stick to their area of expertise.  Just because they live there does not make them an expert in the values of the neighborhood.  With that being said, definately the home inspection.  I want them to know that the home is sound or at least they know what they are getting into.

Have a great weekend.

 

Aug 04, 2012 01:18 PM #20
Rainmaker
1,063,039
Nick T Pappas
Assoc. Broker/Broker ABR, SFR, e-Pro, @Homes Realty Group, Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource
Juli, around here the home inspection almost always comes first as the inspection period is typically 7-10 days of an accepted offer...a cash sale may differ.
Aug 04, 2012 06:43 PM #21
Rainmaker
605,818
Sun City Grand Homes Surprise AZ Real Estate Leolinda Bowers
Long Realty West Valley - Surprise, AZ
Associate Broker Realtor Arizona Golf Communities

The purchase contract drives the inspection, not the home inspector. To be in conformance with the time restraints of the purchase contract, the home inspection must be done prior to the appraisal.

I would suggest that you report this home inspector to Arizona Board of Technical Registration after close of escrow.

Aug 04, 2012 09:31 PM #22
Rainmaker
734,910
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Funny about that site, Leolinda -  I looked it up on line and there is a list of their "rules" for inspectors.  Nowhere does it say anything about be ethical, LOL.  You'll have to check it out.  I just laughed.  

Aug 05, 2012 07:37 AM #23
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John McCormack
Albuquerque Homes Realty * www.AlbuquerqueHomes.com - Albuquerque, NM
AlbuquerqueHomes.com, Albuquerque Homes Realty

Swinging back by to thank you for your support and comments in the Rain and hope you have a great and productive week Juli.  I had to read your response to Leolinda twice!

Aug 06, 2012 01:34 PM #24
Rainmaker
734,910
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

John, the list was long on their REQUIREMENTS and the things that ARE NOT requirements for home inspectors.  Maybe they have a Code of Ethics in another spot for members only?  I'm not sure, but I will be checking into it. 

Aug 06, 2012 02:27 PM #25
Rainmaker
522,299
Mary Douglas
United Country Ponderosa Realty - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Oh Juli, I wish I could be a fly on the wall when you meet with this inspector.  "Neighbors" seem to offer a lot of faulty information quite frequently.  They live there- therefore they know stuff :-]  LOL

Aug 06, 2012 03:44 PM #26
Rainmaker
920,239
Jane Peters
Power Brokers Int'l - Los Angeles, CA
Connecting you to the L.A. real estate scene

That is bordering on criminal.   Here we can't efficiently do the appraisal first.  We tend to lower the inspection period to about 7 days and it is difficult to get the appraiser in before.  Glad you are going to put your foot down.

Aug 06, 2012 05:05 PM #27
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Joni Staples
Berkshire Hathaway Home Services - Anderson Properties - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

Wow! It makes you wonder if he has a friend or someone that he wants to get the house instead. I wouldn't trust him to be honest with his inspections. 

Aug 06, 2012 07:37 PM #28
Rainmaker
734,910
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Exactly, Joni - lie about something, lie about  anything?  Personally, I think he was just being a bombastic idiot blowing hard, but when I was able to put the numbers down in writing, he really backed down.  

Outcome - I asked him if he had his appraiser's license.  Then, I asked him if he was a licensed Realtor®.  Then I asked him if he had put on a 1000 SF room addition to his house.  He kept backing up and hemming and hawing.  I handed him the public records which show the actual SF of his home.  He stammered a little and said something like, "Oh, no - I never told your buyers that. "  I, then, politely told him I appreciated that he was willing to work on a Sunday, but please to just do his job and let me do mine.  I heard him muttering a little name under his breath as I walked away (rhymes with witch), but the buyer said he was really professional after that for the rest of the inspection. 

Aug 06, 2012 07:58 PM #29
Rainmaker
329,904
Sharon Lord
Argent Décor - Phoenix, AZ
Argent Décor - AZ Vacation Home Furnishing Service

UGH!  An expert at home inspections is NOT a lender or realtor - why on EARTH would he give advice on values...?!?!?

Aug 08, 2012 08:03 PM #30
Rainmaker
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Cara Marcelle Mancuso
Long Realty - Dove Mountain, Marana AZ - Tucson, AZ
Call a Marana neighbor, I'm THERE!

Ha - I can just SEE you cornering the guy.  GOOD FOR YOU, Juli!  It is true that once a buyer hears something, it tends to be set in stone.  It's funny how often folks absorb information from most any source instead of going to the professional.  I guess agents are seen as "just trying to make a sale".  I have no desire to deal with buyer's remorse, however...so I don't push!  It makes sense to ask the professionals in their area of expertise for sound advice, as you close your posting with.

So...did the house appraise?  Appraisals seem to be all over the place here in Tucson - it's currently another point of negotiation in the escrow process.

Aug 12, 2012 08:32 AM #31
Rainmaker
734,910
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Cara, still waiting on the signed contract back from the bank.  But, there were two recent sales of the same size which sold for $50,000 over this home within the immediate subdivision, then there was a short sale in need of some work which sold just $11,000 lower.  So, if there's a problem with value, it's the appraiser - not the value of the home, for sure. 

Aug 12, 2012 02:19 PM #32
Rainer
183,344
Dave Sullivan
www.TheCreditGuy.TV - Birmingham, MI
The Real Story on Your Credit Score - TheCreditGuy
 

Excellent information I will forward it if that is ok? thank you!!!

Nov 23, 2012 08:11 AM #33
Rainmaker
734,910
Juli Vosmik
Dominion Real Estate Partners, LLC, Scottsdale, AZ - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Of course, Dave, feel free.

Nov 24, 2012 06:55 AM #34
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