Home inspections and appraisals play key, but separate, roles in the home-buying and -selling process. A home inspection is primarily intended to protect the prospective buyer from purchasing a home with structural defects and other major problems. The home appraisal is meant to protect the lender from paying more than the house is worth.
What Is a Home Appraisal?
The bank requires that a property be appraised to determine its market value. The lender often hires the appraiser, who visually inspects the home for improvements or deficiencies that may lower the value. In addition, the appraiser takes into account the house’s location, square footage and the selling prices of similarly sized and located homes.
The home appraiser usually addresses conditions that are apparent or observable. Unlike a home inspector, an appraiser does not test mechanical systems and major appliances.
What Is a Home Inspection?
A home inspector, hired by the would-be buyer, focuses on the “guts” of the home. He or she assesses the overall condition, paying close attention to mechanical systems to determine if the home needs repairs and if there are any health or safety concerns. They will examine the property in complete detail from roof to floor.
Among other things — they will check the following areas of the property: the structure of the house, the foundation, both interior and exterior construction, the plumbing (pipes), ventilation, heating and air conditioning, installation, electrical, drainage, and all built-in kitchen appliances.
Home Inspectors pay special attention to costly mechanical things homebuyers wouldn’t necessarily notice during a walk-through of the property. A home inspection is highly recommended, though not required in most closing processes.
The licensing laws and regulations for home inspectors do not permit them to develop opinions of property value like Expert appraisers do. A home inspector might estimate the cost of certain repairs, but value opinions are left to the appraiser. As part of the appraisal process, the appraiser might perform some sort of onsite quality, condition, and functional utility survey of the property to determine its relevant characteristics and if it meets certain standards.
No matter how the appraisal inspection appears to the uninitiated, it is not the equivalent of a home inspection. An appraiser is required to observe the subject property and the surrounding area for certain factors which affect the subject property. Appraisers perform similar inspections, to one degree or another, in most appraisal assignments.
An appraisal inspection should not be used as a substitute for a home inspection. Appraisals and home inspections have differing clients and intended uses. In a mortgage lending situation, a home inspection is typically made for the borrower (i.e., the buyer), while the appraisal is performed for the lender.
An inspection is an examination of the condition of a property (at the time of inspection) to provide the buyer with the information needed to make an informed decision on a home purchase. Most homebuyers hire a licensed, certified inspector to do a detailed walk-through of the home to determine the condition and state of the property. Home inspections are optional when purchasing a home, but often highly encouraged, as they allow homebuyers to get a comprehensive picture of what they are really getting into before finalizing the purchase.
In a nutshell, home inspectors want to help the homebuyer make an informed decision before purchasing their home. For that reason, many requested changes (in a home purchase) from the buyers to sellers derive directly from an inspection report and property findings.
At Hudson View, we can provide certified Home Inspectors to help facilitate the valuation of your property.
If you would like to learn more, please visit the FAQs section, or contact us today to Get Started. Or visit us on LinkedIn. Use our services for managing your appraisal needs in the New York & Connecticut areas.
Hudson View Appraisal Services has many years of experience in the business, we have a proven track record of reducing lenders aggravations, efforts, and costs in managing the appraisal process.