Many people out there still do not know the difference between an appraisal and a home inspection. When you are looking to buy a home, and you have been pre-approved by the bank for a mortgage loan, or you are the seller of a home, then an appraisal is an important factor in the purchase transaction. What you need to understand is how an appraisal works and how the appraiser determines the correct value of the property.
A home appraisal is meant to be an unbiased decision by an experienced professional regarding the true value of a home or property. Appraisals are very common and are usually used in the process of buying and selling properties and homes. The appraisal is used to determine whether the home is of the correct value and the contract price matches the condition of that home.
Many factors are taken into consideration like, where the home is located, its current condition and how it looks aesthetically. An appraisal is trustworthy and ensures that the lender is not handing over more money than the home is actually worth. The appraisal is basically a security net for the bank ensuring the new homeowners are not over borrowing on properties that the bank couldn’t reclaim back. Appraisals also consider comparable homes recently sold in the general vicinity.
A home inspection, however, is there to give buyers peace of mind that the home being purchased is in good condition and not falling apart on the inside. A completed home inspection report will give an accurate detailed account of the structure and an overall picture of all working components (plumbing, wiring, HVAC, etc.) and the life expectancy of them.
A home inspection will evaluate the condition of the foundation, the roof condition of the property and more. The findings in a home inspection are often the dealmaker or deal breaker for all parties involved, unless the home is being sold in an “AS-IS” contract. Appraisals are for the banks, the inspection is for the new homeowners.
