Are a home inspection and an appraisal the same thing?

Today we are going to find out about the difference between appraisals and home inspections.  Just yesterday I received an email from a client who asked about an appraisal when they were really meaning an inspection.  It is common in the industry to confuse these so I would like to clarify it today for you.

A home inspection is something that a buyer does to examine the home to make sure that it is structurally sound and make sure that all the electric, mechanical and plumbing systems are in good working order.  An inspection also checks for code compliance and safety issues, for example making sure the roof and foundation are structurally sound as well as any possible mold or toxin problems.  I highly recommend anyone that is purchasing a home to have an inspection completed, whether you are working with us, another realtor or even purchasing a “For Sale By Owner”.  A home is the most expensive investment that most people will make in their lives and it is important to be sure of that purchase.  I also recommend finding an inspector that is AHIT or NAHI certified as they have gone through the training to complete an inspection properly.

The Inspection process also typically happens before an appraisal and is a completely different process.  But during the inspection period you do have the right, as a buyer, to ask the seller to make certain corrections in the home.  Once you come to an agreement with the Seller, then usually the Lender will order the appraisal.

The appraisal is strictly for the lender in the situation where there is a loan to make sure that the value of the home is there for the loan that they are providing for you.  Depending on your financing, it could be a VA appraiser, a Conventional appraiser or an FHA appraiser.  They all have different guidelines and their role is to determine the value for the property.  They will also perform some basic minimal checkups to make sure there is no glaring safety issues.  For example, for a VA appraisal, they will make sure there is no broken glass in the windows and make sure all the hand rails are in place.  They will also make sure that the home is inhabitable with running water and electricity.

It is important for some buyers who will be paying cash to know that they are getting a good deal and they will have an appraisal done.  Everyone who is obtaining a loan will need to get an appraisal but a home inspection is usually optional.  They are always two separate components to the transaction.

If you have more questions about this, please contact me.  My team and I would be more than happy to help you in any way we can.

 

To see a video of this by Jason, please click the link below.

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