Buy a detached home today and you're likely to need, want, or be required to get an appraisal, home inspection, termite report, and survey. But do you need so many checks?

Each is a different report, it's just that sometimes they overlap and sometimes they point out things that another report won't cover. What should you expect from these reports and why would you want all four?

Lenders make loans on the basis of the sale price or the appraised value -- whichever is less. An appraisal is an estimate of value by an independent third party. It's required by lenders and reduces the lender's risk by assuring that the property is at least worth x dollars in today's marketplace and that the lender can safely make a loan based on that valuation.

A survey shows the boundaries of a property, where improvements are located, the volume of the property (area), and such factors as easements and encroachments.

This information can be important to you. For instance, if the current owners have somehow added a garage that just barely straddles the lot line, a neighbor could demand its removal. Or, it may turn out that what looks like the "backyard" is really is much smaller -- it's just that there is no fence.

Surveys also show "easements," essentially the right of others to use your property. For instance, a common is sometimes denoted by the letters PUE, or "Public Utility Easement." This is a "right" that a utility has to enter your property and install, maintain or repair their system. Your cable television company may have an easement across your property, giving them the legal authority to string cable and such.

A home inspection is sometimes confused with an appraisal, but they're not the same. While an appraisal helps to confirm a home's value, an inspection looks at a home's condition. Does the dishwasher work? What about the garbage disposal? Is the electrical wiring up to current city or county code? How many years does the roof have before needing to be replaced? Are there any conducive conditions for termite?

Speaking of termites, lenders require inspections for termites and other wood boring insects. And while lenders require termite inspections, they generally do not say buyers must obtain a home inspection.

If one is important and has been required for decades, why not the other? Surely the lender wants the property in good condition because the property is security for the loan if a borrower does not pay.

Buyers, of course, also want to know about the property's condition. No one wants to be surprised by a major system that is quickly failing or the need to make a big repair.

So do you want all four checks? Of course. Get all four. Sleep at night.

For more articles by David Reed, please press here.

Published: September 21, 2001

Use of this article without permission is a violation of federal copyright laws.

, a veteran Mortgage Banker, successful Real Estate Consultant and author of Your Guide to VA Loans, Mortgages 101: Quick Answers to Over 250 Critical Questions About Your Home Loan, Who Says You Can't Buy a Home!, and Mortgage Confidential: What You Need to Know That Your Lender Won't Tell You, is a former columnist and Contributing Editor with San Diego-based Mortgage Originator Magazine. Reed is President of CD Reed Mortgage Bankers, Austin, TX and is a Past President of the Austin Mortgage Bankers Association.