Difference between home appraisal and inspection
Difference between home appraisal and inspection
While both home appraisals and inspections are crucial parts of the home buying and selling process, they serve distinct purposes and are conducted by different professionals. Here are the primary differences:
Home Appraisal:
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Purpose: The main goal of an appraisal is to determine the current market value of a property. It is used by lenders to ensure that the amount of money they are lending does not exceed the home's worth.
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Professional Involved: Conducted by a licensed appraiser who assesses the property's value.
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Criteria for Assessment:
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Comparative Market Analysis: Appraisers consider the sale prices of similar properties in the area that have sold recently.
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Property Characteristics: This includes the home's size, number of bedrooms and bathrooms, condition, location, and any other special features or upgrades.
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Overall Market Conditions: Appraisers take into account if it's a buyer's or seller's market and the expected future market trends.
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Required by Lenders: Appraisals are typically required when a buyer is obtaining a mortgage. The lender wants to ensure that they are not lending more money than the property is worth.
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Outcome: The outcome is a detailed report that gives an estimated market value of the property. This value can influence the amount a lender is willing to provide for a mortgage.
Home Inspection:
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Purpose: The primary purpose of a home inspection is to evaluate the physical condition of a property, identify any repairs or potential issues, and ensure that all systems are functioning correctly.
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Professional Involved: Conducted by a certified home inspector who assesses the property's structural and functional condition.
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Criteria for Assessment:
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Structural Elements: This includes foundations, roofs, walls, and floors.
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Systems: Inspectors evaluate the electrical, plumbing, heating, and cooling systems.
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Interior and Exterior Features: This involves checking windows, doors, appliances, and even potential safety hazards.
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Additional Areas: Depending on the home and region, inspectors might also evaluate basements, attics, chimneys, and other specific areas.
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Optional but Recommended: While lenders typically don't require home inspections for a mortgage, they are highly recommended for buyers. It's a way for buyers to avoid purchasing a property with major, undisclosed issues.
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Outcome: The outcome is a detailed report that highlights any issues, repairs, or potential concerns with the property. This report can be used by buyers to negotiate repairs or price adjustments with the seller.
An appraisal determines a home's monetary value, primarily for lending purposes,
while an inspection evaluates its physical condition to inform potential buyers about the
state of the property they're considering purchasing.
An appraisal determines a home's monetary value, primarily for lending purposes, while an inspection evaluates its physical condition to inform potential buyers about the state of the property they're considering purchasing.