The Difference Between an Inspection and an Appraisal

 

When you decide to buy your first home, you may come across a number of terms and conditions you’re not familiar with. While you may have a general idea of what an inspection is, maybe you’re not sure why you need one or how it’s different from an appraisal. To keep it simple, here’s an explainer of each one and what they mean for you as a homebuyer.

Home Inspection

Once you’re under contract on a home you’d like to buy, getting an inspection is a key part of the process. An inspection gives you a clear idea of the safety and overall condition of the home – which is important for such a big transaction. As a recent Realtor.com article explains:

“A home inspection is something that protects your financial interest in what will likely be the largest purchase you make in your life—one in which you need as much information as possible.”

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 have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. And don’t worry – you don’t have to go through that process alone. Your real estate agent will be your advocate and negotiate with the seller for you.

Home Appraisal

While the inspection tells you about the current state of the house, an appraisal gives you its value. Bankrate explains:

“When buying or selling a home, an appraisal verifies that the sale price of the home is in line with fair market value. This ensures the homebuyer doesn’t pay more than the home is worth, and the mortgage lender doesn’t lend more than it is worth.”

Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal protects you from overpaying and the bank from lending you more than the home is worth.

And if there’s ever any confusion or discrepancy between the appraisal and the agreed-upon price in your contract, your trusted real estate professional will help you navigate any additional negotiations to try to close the gap.

Bottom Line

The inspection and the appraisal are different but equally important steps when buying a home – and you don’t need to manage them by yourself. Connect with an agent today so you have expert guidance from start to finish.

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Focus on Time in the Market, Not Timing the Market

 

Should you buy a home now or should you wait? That’s a big question on many people’s minds today. And while what timing is right for you will depend on a lot of other personal factors, here’s something you may not have considered.

If you’re able to buy at today’s rates and prices, it may be better to focus on time in the market, rather than timing the market.

The Downside of Trying To Time the Market 

Trying to time the market isn’t a good strategy because things can change. Here’s an example. For the better part of this year, projections have said mortgage rates will come down. And while experts agree that’s still what’s ahead, shifts in various market and economic factors have pushed back the timing of when that’ll happen. Here’s how that’s impacted homebuyers who’ve been sitting on the sidelines. As U.S. News says:

“Those who put off buying a home during the past few years as they were holding out for lower mortgage rates have been left out of the market . . . mortgage rates have stayed higher for longer than previously expected, keeping monthly housing payments elevated. In other words, affordability didn’t improve for those who chose to wait.”

This is why timing the market may not pay off if you’re ready and able to buy now.

The Proof Is in the Pudding: How Homeowners Benefit from Rising Home Prices

Delaying your plans also means missing out on the equity you’d gain if you went ahead with your purchase today. And the potential equity gains that are at stake may surprise you.

Each quarter, Fannie Mae releases the Home Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts are projecting home prices will continue to rise through at least 2028 (see the graph below): 

To give these numbers context, let’s take a look at a breakdown of what you stand to gain once you buy. The graph below uses a typical home’s value to show how a home could appreciate over the next few years using those HPES projections: 

In this example, let’s say you went ahead and bought a $400,000 home at the beginning of this year. Based on the expert forecasts from the HPES, you could gain more than $83,000 in household wealth over the next five years. That’s not a small number.

This data helps paint the picture of why time in the market really matters.

The Advice You Need To Hear If You’re Ready and Able To Buy Now

Right now, you may be focused on what’s happening with mortgage rates and how those impact your monthly payment, but don’t forget to factor in home prices.

Prices are expected to continue climbing, just at a more moderate pace. And while a moderate rise in prices may not be fun for you now, once you own a home, that growth will be a huge perk. That’s the time in the market piece.

Sure, you could try timing the market, but the equity you’ll be missing out on in the meantime is something to seriously consider. If you’re ready and able to buy now, you have to decide: is it really worth waiting?

Rather than focusing on timing the market. It’s better to have time in the market.

As U.S. News Real Estate sums up:

“There’s never a one-size-fits-all answer to whether now is the right time to buy a home. . . . There’s also no way to predict precisely what the market will do in the near future . . . Perfectly timing the market shouldn’t be the goal. This decision should be determined by your personal needs, financial means and the time you have to find the right home.” 

Bottom Line

If you’re debating whether to buy now or wait, remember it’s time in the market, not timing the market. And if you want to get the ball rolling and set yourself up for those big equity gains, connect with an agent to make it happen. 

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Housing Market Forecast: What’s Ahead for the 2nd Half of 2024

 

As we move into the second half of 2024, here’s what experts say you should expect for home prices, mortgage rates, and home sales.

Home Prices Are Expected To Climb Moderately

Home prices are forecasted to rise at a more normal pace. The graph below shows the latest forecasts from seven of the most trusted sources in the industry:

The reason for continued appreciation? The supply of homes for sale. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains:

“One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don’t have housing inventory.”

While inventory is up compared to the last couple of years, it’s still low overall. And because there still aren’t enough homes to go around, that’ll keep upward pressure on prices.

If you’re thinking of buying, the good news is you won’t have to deal with prices skyrocketing like they did during the pandemic. Just remember, prices aren’t expected to drop. They’ll continue climbing, just at a slower pace.

So, getting into the market sooner rather than later could still save you money in the long run. Plus, you can feel confident experts say your home will grow in value after you buy it.

Mortgage Rates Are Forecast To Come Down Slightly

One of the best pieces of news for both buyers and sellers is that mortgage rates are expected to come down a bit, according to Fannie Mae, the Mortgage Bankers Association (MBA), and NAR (see chart below):

When you buy, even a small drop in mortgage rates can make a big difference in your monthly payments. For sellers, lower rates will bring more buyers back into the market, which can help you sell faster and potentially at a higher price. Plus, it may help you get off the fence, if you’ve been hesitant to sell due to today’s rates.

Home Sales Are Projected To Hold Steady

For 2024, the number of home sales will be about the same as last year and may even rise slightly. The graph below compares the 2024 home sales forecasts from Fannie Mae, MBA, and NAR to the 4.8 million homes that sold last year:

The average of the three forecasts is about 5 million sales in 2024 – a small increase from 2023. Lawrence Yun, Chief Economist at NAR, explains why:

“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”

With more inventory available and mortgage rates expected to go down, a few more homes are expected to be sold this year compared to last year. This means more people will be able to move. Let’s work together to make sure you’re one of them.

Bottom Line

If you have any questions or need help navigating the market, reach out to a local real estate agent.

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Replacing Your Deck? Here's How Much You Should Expect to Pay

 Wondering whether to repair or replace your deck? Learn about costs, DIY vs. pro jobs, and money-saving tips.

Decks allow for outdoor dining, relaxation, and entertainment. However, they also deteriorate over time due to wear and tear, so understanding the average costs of deck repair and replacement is crucial for homeowners.

The average cost to repair a deck is about $2,000, but this figure varies depending on the extent of the damage and the materials needed. Standard repair tasks include replacing damaged boards, reinforcing structural supports, and refinishing the surface. The cost to replace a deck is typically around $15,000. However, this price varies depending on the deck size, materials, labor, permits, inspection, scope of work, and geographical location.

Average Deck Repair Costs

Deck life spans typically range from 10 to 30 years, and the cost and quality of deck materials often correlate with the frequency of repairs. The average cost ranges from a few hundred to several thousand dollars, depending on the scope of work and the geographic location of the home.

Minor repairs—such as replacing broken nails, boards, or loose railings—might cost between $100 and $4,000. More extensive maintenance involving structural issues or replacing a significant portion of the deck escalates the cost. This wide range of potential expenses underscores the importance of understanding the average deck repair costs before committing to a contractor.

Factors That Affect Deck Replacement Costs

First, the size. The bigger the deck, the more expensive it will be. The second is the type of material used. A 100 percent wood deck is cheaper, but it requires some maintenance like repainting and sometimes replacement.

While the geographical location of your house affects the labor and material costs, the physical location of the deck also impacts the cost. If it is difficult for laborers to work under specific temperature, time, or space limitations, they may pass on the cost to you. Additionally, unique lighting and railing features also increase prices. Hiring a professional increases the final price, but DIYing increases the amount of time and the risk burden for the homeowner.

DIY vs. Hiring a Professional

Hiring a professional can significantly affect the overall cost of deck repair or replacement. “A professionally built deck usually costs three times more than the materials for a DIY deck, but it’s really important to know your local building codes. Simple structural mistakes, such as joists and beam sizes, post-to-beam connections, or even the way you use screws and nails, are fundamental to the durability and integrity of the deck. Ignored mistakes could put your family at risk or cost even more to rebuild,” notes Machado.

So, while DIY repairs may seem cost-effective initially, they require time, skills, and tools. Replacing a few boards or applying fresh deck stain is manageable for DIY enthusiasts. However, for long-term safety, complex structural repairs or complete deck replacements are best left to professionals. Hiring a professional contractor can ensure the job has the right permits and is done correctly, albeit at a higher cost.

The 9 Best Deck Stains of 2024 to Protect and Revive Your Deck

Tips and Strategies for Saving on Deck Replacement Costs

Several strategies can help you save money on a deck replacement.

• Consider cost-effective materials, like pressure-treated lumber or composite decking, over expensive premium hardwoods or imported materials.
• Reuse existing deck components. Framing or railing can sometimes be salvaged and reused to reduce material costs.
• Shop around. If you intend to replace your deck fully. I would also advise that you shop around for companies who can provide this service. In doing this, you may be able to find a business who can source materials for cheaper or charge less for their time and labor.
• Obtain multiple quotes from different contractors to negotiate the best value for price. Falahee adds, “Keep an eye on the cost difference between certain materials. You should also maintain your deck yourself to prevent damage.”
• Keep the deck size small. Another cost-saving tip is to keep your deck size small. It may be hard to define precisely how much space you need, but consider the deck’s purpose. If it will be primarily used for lounging and grilling, you might not need as much space as if you plan to host regular outdoor family meals. Take time to consider reasonable sizes for your desired deck experiences and research different materials best suited for the job.

Tips for Prolonging the Life of Your Deck

Quarterly maintenance prevents minor issues from becoming major headaches. Promptly address any early warning signs of deterioration or weather damage to extend the life span of your deck and minimize repair expenses.

Additionally, avoid excessive weight loads, keep the deck surface clear of debris, and don’t lean heavy items on the support beams. Watch out for wood-eating bugs and any wobbling. Both jeopardize the structural integrity of your deck.

Do I Need to Replace My Deck?

If your deck is over two decades old or is in visibly poor shape, the best option might be to replace it rather than undertake cosmetic repairs. Signs that it’s time to replace your deck include significant termite damage, rotting, warping wood, mold, cracked or damaged support posts, loose railings, loose or bowing boards, and wobbly stairs.

Consult with a decking professional to help your family safely enjoy your deck for many years.

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