What’s the Difference Between a Home Inspection and Home Appraisal?
As a title company with real estate lawyers on staff, we get asked to define specific terminology. One frequently requested term we're asked to clarify is the difference between a home inspection and an appraisal.
If you were wondering, according to Bank Rate, a typical single-family home appraisal ranges from $300 to $400. Which seems like a lot if you're uncertain why you need to pay for it?
So, let's define what it is here.
What is a Home Appraisal?
Appraisals are federally regulated, and required by all lenders. These home appraisals are conducted by an appraiser who must obtain a license or be certified to provide their report.
The main objective of an appraiser is to provide the mortgage lender with data that will determine the exact price of the home they are reviewing, and whether it is worth their while to give the home buyer the funds.
A home appraiser will view the property with a comparable market analysis report (CMA).
A CMA will inform an appraiser of the price homes have sold for in the last nine months in the surrounding area.
So, what is an appraiser looking for? They are looking at the following:
- Any cracks, damage, and leaks
- Whether the size of the home and the property lot is correct
- Condition of the foundation and roofing
- Lighting and plumbing
- What condition the swimming pool and sprinkler systems are in
The best advice about home appraisals is they take about an hour or two and will take a few days before the report is sent to you, or a Notice of Value (NOV).
An NOV is given in increments of $500, and if it comes in lower than the asking price, you might need to call in another appraiser.
What is a Home Inspection?
Lenders do not require a home inspection, but it is in your best interest as a home buyer to have one completed . Before making the final offer or signing the closing agreements, you will want to conduct a home inspection.
A home inspection gives the buyer a better insight into the home's condition. You'll contact a home inspector to ensure that there are no significant hidden problems.
These issues can include mold, electrical problems, and HVAC repairs. While home inspectors won't automatically check for termite damage or dangerous asbestos, you can specify that they do so.
Selecting the correct inspector is also crucial as you need to trust their property assessment.
There are numerous types of home inspections; these include focusing on a particular element around the home. These include:
- Roof inspection
- Pest inspection
- Foundation and structural
Ask Experienced Real Estate Attorneys For a Reference
It is very important to have an expert on your side when hiring an appraiser or inspector for your new home.
At Emerald Coast Title Services, our real estate lawyers have been in the real estate title business for many years, and we will quote you on our services for free.