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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Topic:
Real Estate Best Practices
Location:
Arizona Maricopa County Scottsdale
Groups:
Active Rain Newbies
BananaTude
Tags:
appraisal versus home inspection

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Ambassador
625,691
Doug Rogers
Your Pineville Louisiana Agent
Bayou Properties Realty

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.

August 03, 2012 07:27 AM
Ambassador
1,440,489
Karen Kruschka
- "My Experience Isn't Expensive - It's PRICELESS"
RE/MAX Real Estate Connections

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

August 03, 2012 11:44 AM
Rainmaker
839,534
Joshua Zargari
MJ Decorators Workshop
MJ Decorators Workshop LI staging and home decorating

Happy Friday Juli.

Nothing to add to the above comments.

Have a nice weekend.

August 03, 2012 02:27 PM
Rainmaker
857,042
Donna Foerster
Metro Denver Real Estate Agent
Cherry Creek Properties, LLC

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. 

August 03, 2012 05:17 PM
Rainmaker
220,174
Pamela Smith
Sun City West, Corte Bella, Sun City Grand
Long Realty West Valley

Juli,

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

August 04, 2012 07:43 AM
Rainer
121,976
Debora Nichols
Realtor Anthem,Phoenix,Scottsdale,Glendale,Peoria
Residential Sales, Purchases, Investors, Vacation Homes

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.

 

August 04, 2012 01:18 PM
Rainmaker
981,169
Nick T Pappas
Madison & Huntsville Alabama Real Estate Resource
Assoc. Broker/Broker ABR, SFR, e-Pro, @Homes Realty Group, Huntsville AL
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.
August 04, 2012 06:43 PM
Rainmaker
593,600
Sun City Grand Homes Surprise AZ Real Estate Leolinda Bowers
Associate Broker Realtor Arizona Golf Communities
Long Realty West Valley Sun City Grand Surprise Arizona

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.

August 04, 2012 09:31 PM
Rainmaker
706,532
Juli Vosmik
Scottsdale/Cave Creek, AZ real estate 480-710-0739
Dominion Real Estate Partners, LLC, Scottsdale, AZ

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.  

August 05, 2012 07:37 AM
Ambassador
829,795
John McCormack
AlbuquerqueHomes.com
Albuquerque Homes Realty * www.AlbuquerqueHomes.com

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!

August 06, 2012 01:34 PM
Rainmaker
706,532
Juli Vosmik
Scottsdale/Cave Creek, AZ real estate 480-710-0739
Dominion Real Estate Partners, LLC, Scottsdale, AZ

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. 

August 06, 2012 02:27 PM
Rainmaker
508,865
Mary Douglas
REALTOR, Red Feather Lakes, Colorado
United Country Ponderosa Realty

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

August 06, 2012 03:44 PM
Rainmaker
882,166
Jane Peters
Connecting you to the L.A. real estate scene
Power Brokers Int'l

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.

August 06, 2012 05:05 PM
Ambassador
1,088,791
Joni Staples
Your Huntsville / Lake Livingston Area REALTOR®
Berkshire Hathaway Home Services - Anderson Properties

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. 

August 06, 2012 07:37 PM
Rainmaker
706,532
Juli Vosmik
Scottsdale/Cave Creek, AZ real estate 480-710-0739
Dominion Real Estate Partners, LLC, Scottsdale, AZ

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. 

August 06, 2012 07:58 PM
Rainmaker
329,854
Sharon Lord
Argent Décor - AZ Vacation Home Furnishing Service
Argent Décor

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

August 08, 2012 08:03 PM
Rainmaker
467,599
Cara Marcelle Mancuso
Call a Marana neighbor, I'm THERE!
Long Realty - Dove Mountain, Marana AZ

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.

August 12, 2012 08:32 AM
Rainmaker
706,532
Juli Vosmik
Scottsdale/Cave Creek, AZ real estate 480-710-0739
Dominion Real Estate Partners, LLC, Scottsdale, AZ

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. 

August 12, 2012 02:19 PM
Rainer
167,069
Dave Sullivan
The Real Story on Your Credit Score - TheCreditGuy
www.TheCreditGuy.TV
 

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

November 23, 2012 08:11 AM
Rainmaker
706,532
Juli Vosmik
Scottsdale/Cave Creek, AZ real estate 480-710-0739
Dominion Real Estate Partners, LLC, Scottsdale, AZ

Of course, Dave, feel free.

November 24, 2012 06:55 AM
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Rainmaker
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Juli Vosmik

Scottsdale/Cave Creek, AZ real estate 480-710-0739
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