You know, those closing costs can really add up. And sometimes my clients ask me why they have to pay BOTH an appraiser AND an inspector. The answer is, these two reports are designed for two different purposes. One protects YOU and the other protects your lender.
An appraisal is required by your lender and protects the mortgage companyby comparing your new home to similar homes in the neighborhood. The US Dept of Housing and Urban Development (HUD/FHA) lists three purposes for an appraisal...
In other words, an appraisal re-assures the lender that your mortgage is a relatively safe investment.
An inspection, on the other hand, is designed to protect you, the buyer, by taking an in-depth look at the condition of the property and identifying any maintenance issues that might crop up after move-in. HUD lists three purposes for an inspection...
An inspection gives the buyer the information needed to ask for problems to be fixed before the closing or to negotiate a repair allowance into the final sales price.
So yes, it is necessary to obtain both an appraisal and an inspection report.