What Is A Property Condition Assessment, and Is It Required?

The process of getting your home ready to sell can feel daunting. If you're researching real estate sales for the first time, you may come across the term "property condition assessment." But, what exactly is a property condition assessment? Here is a closer look at required inspections when selling your home.

What Is a Property Condition Assessment?

A property condition assessment is a comprehensive building and property inspection ordered by the lender in a real estate transaction. These assessments include a walkthrough survey that covers all aspects of the building's structure and function.

Common points of focus during these assessments include the building frame and roof, plumbing, wiring, heating, and air conditioning. Safety features such as fire protection systems are assessed as well.

After the assessment, the inspector creates a report estimating the cost to complete any required repairs. This property condition report may include photos of any damage present in the building. The report allows lenders and buyers to accurately determine the value of the property.

Is a Property Condition Assessment Required for Home Sales?

Property condition assessments are traditionally a part of commercial real estate sales. Therefore, this assessment is not a required part of the residential sale process.

Real estate investors and companies that purchase commercial properties rely on property condition assessments to make valuable investments. As explained by Partner Engineering and Science Inc., "A Property Condition Assessment, also called a Property Condition Report, is an evaluation of the capital expenses that will likely be required to maintain an asset in the short- and long-term."

While property condition assessments don't apply to residential sales, home buyers still want assurance that the house they're buying will meet their quality expectations. What options do home buyers have? This is where bank appraisals and inspections come in.

What Is a Bank Appraisal in Residential Real Estate?

A bank appraisal is an assessment performed during a residential sale primarily concerned with the home's value. Mortgage lenders require an appraisal before approving financing before the buyer. This ensures that the home's value matches the loan amount. Appraisals are also sometimes necessary when a homeowner refinances their mortgage.

Licensed appraisers perform bank appraisals before a home sale. Appraisers use a quick walkthrough to value the home based on recent comparable home sales in the area. The appraiser decides on any necessary upgrades or repairs before closing the deal. They will then prepare reports for all parties in the transaction to ensure that everyone agrees on the home's value. The buyer will usually be responsible for paying any appraisal fees.

What Is an Inspection in Residential Real Estate?

While appraisals focus on a home's value, an inspection confirms that a house is safe to occupy and has no hidden problems that may require significant repairs.

A home inspection is the closest thing to a property condition assessment in the realm of residential real estate. A home inspection will cover many of the same bases, such as HVAC, plumbing, wiring, and the health of the frame and foundation. Inspections protect home buyers from unforeseen expenses that arise due to the condition of the home.

Mortgage lenders usually don't require a home inspection with traditional financing. However. buyers purchasing with an FHA or VA loan may require home inspections. Many home buyers choose to hire a professional home inspector for peace of mind about the quality of the home.

Skip Appraisals and Inspections With Simply

The traditional real estate process has rather strict requirements regarding the condition of a house for sale. Your home may need multiple appraisals and inspections in the interest of getting it market-ready for viewers. Does this mean selling your house isn't an option if it's not in great condition?

Fortunately, homeowners interested in selling their house as-is have another option. Instant cash buyers purchase homes in almost any condition, with no repairs or inspections required. Simply is a cash buyer dedicated to providing the highest offers for the homes we buy.

When you sell as-is for cash, you receive a payment for the value of your home in one lump sum. The initial cash offer will take any needed repairs or upgrades into account. This way, you can sell your home for close to full value and close as quickly as possible.

If you're looking to sell your home without appraisals or inspections, selling for cash could be the answer. Request an offer from Simply to start the process in as little as 30 seconds!