Appraisal or Home Inspection. What Is the Difference?
August 2 2016 Posted by
Appraisal or Home Inspection… What’s the Difference?
Often during the homebuying process, home inspections and appraisals are both common practices. So what’s the difference?
A home inspection is often a condition of a purchase and is usually done to protect the homebuyer. A qualified home inspector will assess the physical condition of the home to help determine if everything is in good working order and to confirm the home is without any major problems.Sellers sometime have a home inspection completed prior to putting their home up for sale to find out what is needed to be fixed before selling the home. You typically receive a schedule outlining what repairs are needed and by when. Home inspections do not estimate the value of a home.
An appraisal is an assessment of the home’s value to confirm that the property is suitable security for the mortgage. Lenders and insurers take on their own financial risk and need to make sure that a home is actually worth the amount of money it is being purchased for. Lenders and insurers want to make sure that they are not lending more than the home is actually worth. They also need to feel confident in the property before they approve the mortgage. The value is determined by comparing the home to similar properties in the same area that have recently sold.
Although home inspections and appriasals are very different, both are equally important.