A home inspection and appraisal are two inevitable steps in almost every real estate transaction.
Picture a licensed expert combing through your house, taking note of its size and amenities, jotting down remarks about its condition. So, which one is this? Is it an inspection or is it an appraisal?
Without a doubt, these two processes can cause some confusion. One can easily be mistaken for the other.
Colleen Harding from Income Realty Corporation, a local real estate and property management company, explained what’s the difference between them. Keep reading to find out.
What Is A Home Inspection?Simply put, a home inspection is an assessment of the home. The inspection is carried out by a qualified and trained home inspector.
A home inspection focuses on the performance of the home, rather than cosmetic, code or design issues. It’s often but not always performed at the time of the sale of the home.
It looks at the features a buyer or seller may be considering, including structural issues, foundational issues, and those areas a flipper or rehabber may be trying to hide.
The following are common issues a professional inspector looks at:
For this reason, many buyers require these inspections to be done prior to buying a home.
This inspection checks the chimney for top to bottom for cracks, defective flashing, broken caps, creosote, and soot build-up. Inspectors also check for leaks.
Leaks occur around the chimney’s base, but holes in the chimney also permit the chimney to leak.
A radon test is another inspection a buyer has the option to perform when buying a home. The test checks the air levels to determine if any radon gas is present.
Generally speaking, home inspections last anywhere from three to four hours. The inspector then creates a report and sends it to the clients within 24 hours upon completion of the service.
Depending on such factors as age and size of the home, inspections can cost anywhere between $300 and $550.
What Is A Home Appraisal?A home appraisal is a fair market value of a home’s worth. All lenders order a home appraisal during the mortgage loan process so that there is an unbiased and objective way to measure the market value of a home.
All the lender wants is to ensure they have sufficient assets in case the borrower defaults on their loan obligations.
Most appraisers start with a property observation of the home’s interior and exterior. They take note of the condition, the floor plan, and size of the home, functionality, and overall appeal.
They also look at comparative properties in the neighborhood as well. Then, similar to an inspector, the appraiser will write an appraisal report detailing his findings.
Appraisal reports usually take longer to generate than inspections, often taking between two to seven days. An appraisal report usually includes:
What are Main Differences?Now that you understand what an inspection and an appraisal are, let’s take a look at the obvious differences between the two.