During the home buying process, home appraisers and home inspectors are both crucial when evaluating a home. For a buyer, a home appraisal, conducted by a person called a home appraiser, is required before approving customers for a loan. A home inspection, conducted by a home inspector, examines the property’s condition to discover any problems before the sale of the home.
Home Appraisal Overview
Hired by the lender (often a bank), a home appraiser evaluates the home’s market value. A qualified home appraiser should be certified, familiar with the local area, and impartial. Additionally, they must follow many government regulations. When determining the value of the home, the appraiser considers characteristics such as the condition of the home, location, square footage, number of rooms, and the recent selling prices of comparable homes. Furthermore, the home appraiser also examines the outside of the home. They may explore the foundation, paint, roof, garage, driveway, patios, decks, pools, and fencing of the home.
After examining the home, the home appraiser creates an appraisal report presented to the buyer. This report highlights comparable home sales as well as market sales data, public tax, photographs of the home, and land records that the home appraiser used to determine the home’s market value.
If the appraised value is lower than the contracted price, you can usually withdraw your offer and have your deposit returned, but this is dependent on your initial sales agreement. If the appraised value is higher than the contracted price, you have more equity in the property.
Appraisal costs are included in the closing costs and may cost a few hundred dollars to complete. A basic understanding of home appraisals creates a smoother process to home ownership.
Home Inspection Overview
Geared towards potential home buyers, home inspectors assess the overall condition of the home. They determine necessary home repairs and major health or safety concerns. Home inspectors examine major appliances and mechanical systems such as plumbing, electrical, heating, and cooling. Furthermore, home inspectors also explore evidence of insects, fire or water damage, sewage problems, and other issues that may affect the value of the property. Note: Home inspectors are not experts when it comes to addressing specific issues with the items being inspected. Although they cannot guarantee anything, they often times spot major concerns and issues.
When hiring a home inspector, consider their experience, costs, time and whether they are certified/licensed by an accredited organization.
During the home inspection, follow the home inspector for an in-depth understanding of the potential issues with the home. The home inspector also creates an inspection report, delivered to the buyer.
While inspections are helpful, there is no guarantee they will find all problems. If a major home issue is discovered, discuss with the seller about possible solutions or renegotiate your original offer. The inspection itself may cost a few hundred dollars and may take 3-4 hours to complete. Learn more about preparing for a home inspection.