Unwrapping what to expect in your home inspection, appraisal and closing- HousingWire


What is the difference between a home inspection and an appraisal? Have you made a budget for the closing costs?

The journey to buying a home can seem daunting when there are questions like these at every turn. Before you get overwhelmed, keep in mind that critical milestones of home inspection, appraisal, and closing processes are all great ways to get to know your future new home better. And if you start your research early, you’ll be much better prepared when it comes time to have a home inspected and valued.

Here’s what to expect in three crucial parts of buying a home.

Home Inspection

So you’ve found a house and you’ve made an offer… now what? The home inspection is the last opportunity to check for any defects on the home before committing to a purchase. This usually takes place within seven to ten days of the first offer. A home inspector, who is typically hired and paid by the buyer, will look at the plumbing, electrical, and overall foundation of the home, then provide a report of their findings. While home inspections are not required, they provide the buyer with several important opportunities in the home buying process. Depending on what the inspector discovers, the inspection report can provide an opportunity to negotiate features that need repair or replacement. You may be able to ask the seller to pay for the improvements, or you may be able to request a lower sale price to offset the cost of the repairs.

Please note that most inspection reports contain findings of multiple defects. That doesn’t mean you have to pass the house on. After all, no home is perfect. What matters is whether the defects are deal breakers for you, the buyer. For example, a minor plumbing problem can be fixed fairly easily and quickly. However, a structural problem can cause safety issues and lead to expensive repairs that you may not want to do.

“The biggest problems are almost always water,” says Nick Gromicko, a certified home inspector. “Roof leaks, plumbing leaks and foundation leaks. And of course, water leads to damage to personal property. And then water leads to mold.”

Home inspections provide valuable information that can make or break your decision to buy a home, as well as help you plan for future improvements.


A valuation is a valuation of a property by a third party. The buyer usually covers the cost of the valuation. The lender orders it, prior to the closing of the house, to ensure that the house is worth at least as much as what the buyer undertakes to pay. A qualified appraiser will compare recent sales of similar local properties, market trends, and perform a visual inspection of the home’s interior and exterior to determine the property’s fair market value. For example, an appraiser checks the condition of the walls, roof, floors and overall integrity of the structure. They will also consider any upgrades or amenities, as well as how maintained the home is.

If the appraised value matches or exceeds the contract price, the transaction can proceed as planned. Should the valuation be lower than the contract price, this may have consequences for the closing process.

If the seller is eager to sell the property, he can lower the listing price to match the valuation. On the other hand, the seller may disagree with the valuation and refuse to negotiate. If this happens, buyers can make up the difference or request a new valuation in the hopes that the price will match. While buyers can request a second appraisal, the lender decides whether to go through with it. If it is declined, buyers can also choose to forgo the deal.

Due to the current booming housing market, the appraisal process can take days to weeks. The process may take even longer if the buyer or seller requests a second valuation.

“Something buyers are not aware of is that the appraisal process can take some time depending on location, geography and the number of appraisers available at a company,” said Anthony Masseria, Vice President and Area Lending Manager at citi. “But once the appraiser is home, it usually takes about five working days,” Masseria estimates.

While the appraisal process can be stressful for buyers, it can be an important part of the closing process. An appraisal ensures that both the lender and potential buyers feel comfortable and confident in their investment.


Before getting the keys to their new home, buyers must go through the closing process, which completes the home purchase. During closing, buyers sign various legal documents and pay additional fees, some of which are recurring costs, such as property taxes. Others are one-time closing costs, including: loan creation fees, application fees, mortgage brokerage fees, property insurance, appraisal fees, title search fees, and other miscellaneous payments. Closing costs vary from state to state, but not all home buyers are aware of the costs prior to closing. According to a survey by ClosingCorp, a data and technology provider on residential real estate closing costs, 50% of buyers were “amazed” at the amount charged at closing.

Understanding the process of buying a home is not easy. There are many different steps, which is why it is imperative to ask questions and make sure you work with professionals who can guide you through the entire process.

“Because there are so many different parties involved in completing the transaction, communication is essential. That’s why it’s important to set the right expectations with customers and guide them through the different stages,” said Citi’s Masseria.

The home inspection, appraisal, and closing are all critical steps in the home buying process. Knowing what to expect will ensure that you are financially and emotionally prepared to close your home.

The Citi team wants you to feel confident when purchasing a home. By working with you through the mortgage process, Citi home loan agents are on hand to help you navigate inspections, appraisals, closings and more. click here to learn more about how to get into the home buying process with everything you need to make the most informed choices.


Sponsored Content presented by Citibank, NA NMLS #412915. Member FDIC and Equal Housing Lender.

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