What’s the difference between an Appraisal and the Home Inspection?
When placing your home on the market, you will come across two types of services prior to the sale of the home. The types of services are the home inspection and appraisal Many people tend to think that appraisal and inspection are one and the same. But there are few notable difference between a real estate appraisal and the home inspection.
Knowing the difference between the two services is important, as they each serve an entirely different purpose in the real estate transaction. The purpose of the appraisal is to provide a third-party report on the monetary value of the property based on the elements of the home and fair market. The appraisal is necessary in order to be sure that all parties involved in the transaction receive the accurate and fair value of the property. The main difference between the real estate appraisal and the inspection is that the appraisal deals with the value of the real estate, whereas the inspection helps you understand the current condition of the home and avoid costly repairs.
The Appraisal Process vs Home Inspection
Despite the similarities of real estate appraisals and home inspections, one of the key differences is that the appraiser will check the condition of the home and its major systems, but this is less thorough than having a home inspection. The appraiser also factors in the comparable sales and prices of comparable homes in the neighborhood to come up with an accurate value for the property. As well as some other factors such as nearby school zones, crime rates, lot size, and boundary surveys.
The appraiser objective is to formulate an unbiased, accurate opinion of the value of the property. With the appraisal, you can expect the final report to include comparable sales, statistics on current real estate market trends, and other relevant information that may have gone into calculating the property value.
The inspector’s objective is to inform and educate the buyer or seller about the current condition of the home. Unlike the appraisal, the home inspection is a much more thorough process. The findings of your home inspection will fall into four categories:
- Major defects, such as structural failure:
- Conditions that can lead to major defects such as a roof leak;
- Issues that may hinder your ability to finance, legally occupy, or ensure the home if not rectified immediately
- Safety hazards, such as exposed, live buss bar at the electrical panel.
Is It Necessary to have Home Inspection & Appraisal?
The home inspection and real estate appraisal are both essential for protecting your real estate investment. By having a home inspection prior to the purchase of your home, you can help avoid costly mistakes such as faulty foundation or outdated electrical system.
By hiring an appraisal in addition to the home inspector gives you an unbiased, accurate value of the property. Keep in mind that real estate appraisal and inspection are two unique processes that require separate skill sets and expertise. Therefore can’t use a home inspection report as a means of calculating a home value.
If you are in the market for a new home, get a peace of mind and do yourself a favor and get the home inspection. Do you have questions about the home inspection process? Contact Tim Rupon from S&J Home Inspections for all your home inspection needs.
Book a home inspection today!
