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Buying Myths

What’s the Difference between an Appraisal and a Home Inspection?

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If you’re planning to buy a home, an appraisal is an important step in the process. It’s a professional evaluation of the market value of the home you’d like to buy. In most cases, an appraisal is ordered by the lender to confirm or verify the value of the home prior to lending a buyer money for the purchase. It’s also a different step in the process from a home inspection, which assesses the condition of the home before you finalize the transaction. Here’s the breakdown of each one and why they’re both important when buying a home.

Home Appraisal

The National Association of Realtors (NAR) explains:

“A home purchase is typically the largest investment someone will make. Protect yourself by getting your investment appraised! An appraiser will observe the property, analyze the data, and report their findings to their client. For the typical home purchase transaction, the lender usually orders the appraisal to assist in the lender’s decision to provide funds for a mortgage.”

When you apply for a mortgage, an unbiased appraisal (which is required by the lender) is the best way to confirm the value of the home based on the sale price. Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn’t loan you more than what the home is worth.

This is especially critical in today’s sellers’ market where low inventory is driving an increase in bidding wars, which can push home prices upward. When sellers are in a strong position like this, they tend to believe they can set whatever price they want for their house under the assumption that competing buyers will be willing to pay more.

However, the lender will only allow the buyer to borrow based on the value of the home. This is what helps keep home prices in check. If there’s ever any confusion or discrepancy between the appraisal and the sale price, your trusted real estate professional will help you navigate any additional negotiations in the buying process.

Home Inspection

Here’s the key difference between an appraisal and an inspection. MSN explains:

In simplest terms, a home appraisal determines the value of a home, while a home inspection determines the condition of a home.”

The home inspection is a way to determine the current state, safety, and condition of the home before you finalize the sale. If anything is questionable in the inspection process – like the age of the roof, the state of the HVAC system, or just about anything else – you as a buyer have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. Your real estate agent is a key expert to help you through this part of the process.

Bottom Line

The appraisal and the inspection are critical steps when buying a home, and you don’t need to manage them by yourself. Let’s connect today so you have the expert guidance you need to navigate through the entire homebuying process.

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Buying Myths

Is It Easier To Find a Home To Buy Now?

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One of the biggest hurdles buyers have faced over the past few years has been a lack of homes available for sale. But that’s starting to change.

The graph below uses the latest data from Realtor.com to show there are more homes on the market in 2024 than there have been in any of the past several years (2021-2023):

a graph of a number of homes for sale

Does That Mean Finding a Home Is Easier?

The answer is yes, and no. As an article from Realtor.com says:

There were nearly 15% more homes for sale in February than a year earlier . . . That alone could jolt the housing market a bit if more “For Sale” signs continue to appear. However, the nation is still suffering from a housing shortage even with all of that new inventory.

Context is important. On the one hand, inventory is up over the past few years. That means you’ll likely have more options to choose from as you search for your next home.

But, at the same time, the graph above also shows there are still significantly fewer homes for sale than there would usually be in a more normal, pre-pandemic market. And that deficit isn’t going to be reversed overnight.

What Does This Mean for You?

You might find a few more choices now than in recent years, but you shouldn’t expect a ton of options.

To help you explore the growing list of choices you have now, team up with a local real estate agent you trust. They can really help you understand the inventory situation where you want to buy. That’s because real estate is local. An experienced agent can share some smart tips they’ve used to help other buyers in your area deal with ongoing low housing supply.

Bottom Line

If you’re thinking about buying a home, team up with a local real estate agent. That way, you’ll be up to date on everything that could affect your move, including how many homes are for sale right now.

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Buying Myths

Single Women Are Embracing Homeownership

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In today’s housing market, more and more single women are becoming homeowners. According to data from the National Association of Realtors (NAR), 19% of all homebuyers are single women, while only 10% are single men.

If you’re a single woman trying to buy your first home, this should be encouraging. It means other people are making their dreams a reality – so you can too.

Why Homeownership Matters to So Many Women

For many single women, buying a home isn’t just about having a place to live—it’s also a smart way to invest for the future. Homes usually increase in value over time, so they’re a great way to build equity and overall net worth. Ksenia Potapov, Economist at First American, says:

“. . . single women are increasingly pursuing homeownership and reaping its wealth creation benefits.”

The financial security and independence homeownership provides can be life-changing. And when you factor in the personal motivations behind buying a home, that impact becomes even clearer.

The same report from NAR shares the top reasons single women are buying a home right now, and the reality is, they’re not all financial (see chart below):

a blue and white diagram with white text

If any of these reasons resonate with you, maybe it’s time for you to buy too.

Work with a Trusted Real Estate Agent

If you’re a single woman looking to buy a home, it is possible, even in today’s housing market. You’ll just want to be sure you have a great real estate agent by your side.

Talk about what your goals are and why homeownership is so important to you. That way your agent can keep what’s critical for you up front as they guide you through the buying process. They’ll help you find the right home for your needs and advocate for you during negotiations. Together, you can make your dream of homeownership a reality.

Bottom Line

Homeownership is life-changing no matter who you are. Connect with a local real estate agent to talk about your goals in the housing market.

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Buying Myths

What Every Homebuyer Should Know About Closing Costs

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Before making the decision to buy a home, it’s important to plan for all the costs you’ll be responsible for. While you’re busy saving for the down payment, don’t forget you’ll want to prep for closing costs too.

Here’s some helpful information on what those costs are and how much you should budget for them.

What Are Closing Costs?

A recent article from Bankrate explains:

Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .”

Simply put, your closing costs are the additional fees and payments you have to make at closing. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting Fees

How Much Are Closing Costs?

According to the same Freddie Mac article mentioned above, they’re typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to budget.

Let’s say you find a home you want to purchase at today’s median price of $384,500. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,690 and $19,225.

But keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.

Make Sure You’re Prepared To Close

Freddie Mac provides great advice for homebuyers, saying:

“As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”

The best way to do that is by partnering with a team of trusted real estate professionals. That gives you a group of experts to help you understand how much you’ll need to save and what you’ll want to be prepped for. It also means you have go-to resources for any questions that pop up along the way.

Bottom Line

Planning for the fees and payments you’ll need to cover when you’re closing on your home is important. Partnering with a local real estate professional can give you the guidance and confidence you need throughout the process.

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The information contained, and the opinions expressed, in these article are not intended to be construed as investment advice. Let's Talk Real Estate and Keeping Current Matters, Inc. do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Let's Talk Real Estate and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.