Whether you are selling or buying, an inspection of the property will reveal relevant defects related to the improvements.  The inspection period is early in the contingency timeline on Kauai, one of the steps a buyer can take soon after entering the agreement.
An appraisal, on the other hand, is done near the end of the contingency timeline of the transaction.  The purpose of the appraisal is to assess the value of the property, but appraisals also reveal defects, typically defects that are obvious or documented, such as set-back violations or encroachments revealed previously by a survey.

Appraisals are typically meant for a lender.  If the buyer requires a mortgage to purchase the property, the lender will need to know what the value of the property is before lending.

Importantly, both the inspection and the appraisal are typically done at the expense of the buyer.  This means if the results of the inspection or the appraisal are unacceptable to the buyer or to the lender, the cost remains for the buyer even if the transaction does not complete.


Scheduling an inspection or appraisal is also an important consideration. On Kauai, there are enough inspectors to meet demand, so typically the inspection can be scheduled into the agreement’s timeline without too much difficulty.

Appraisals on the other hand can be a challenge for two reasons; a limited number of appraisers and the various lender requirements that require specific types of appraisals.  Currently, allowing 45 days lead time for the appraisal is a good idea!  

A large part of the buyer’s agent’s work is to manage this timeline and arrangements, coordinating these and related activities such as related repairs and surveys with the seller and the third-party vendors.


Should a seller get an inspection before going to market, or an appraisal before listing the property?  This is a good question because discoveries when in the contract can severely disrupt the transaction’s schedule.  A survey is done at the seller’s cost typically so this is something that surely should be done as soon as possible.

Termite inspection, on the other hand, is paid for by either the buyer or the seller, though on Kauai it is common that the seller covers this cost.  Any treatment is typically a seller’s expense.  This is different than the general inspection and presents an additional scheduling problem if fumigation is required because there is only one company on the island that does fumigation!

It is true to some extent that during a seller’s market, a new buyer can be found just as quickly as the transaction can derail. Oppositely, during a buyer’s market, a new property can be found as quickly as a transaction can fall apart.

Nonetheless, the price can be impacted, costs can increase, and precious time is wasted in many cases if there is a delay during the transaction.  To avoid this, it is important that the seller knows the property and discloses its defects upfront. Buyers also should not be surprised once they are in contract, though it is often the case that discoveries are made during the contract that surprise both parties.

Therefore, in some cases, it may be a good idea for the seller to invest in a home inspection before going to market.  In extreme cases, an appraisal may be helpful, though typically a survey, inspection, and a real estate professional’s market analysis would suffice.
Just keep in mind that it is to the benefit of all involved parties to have a clear view of the condition of the property’s improvements, the status of its ownership, conditions of its boundaries, and an analysis of the market when dealing with a real property transaction.  The earlier the better!

Also note that once in contract, there is a timeline that needs to be managed, and a successful conclusion to the transaction will require the cooperation of many third parties as they coordinate with the buyer’s agent and seller.

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