Appraisals and Inspections for Home Buyers 101

How Do Appraisals and Inspections Differ?

What is the difference between a home appraisal and a home inspection? While both are important components when purchasing a home, the processes differ in their objectives. Appraisals evaluate the property’s value while home inspections assess the condition of a specific home. An appraiser will perform a general walkthrough of the property by taking note of the home’s condition and collecting information that will be used to compare the home’s features, location and finishes with comparable sales in the area. An inspector digs a bit deeper into the actual structure to give a more comprehensive report on the home’s condition.

Because of the nature in helping determine the value of a home, most conventional financial lenders require appraisals as part of the loan approval process to ensure the loan does not exceed the property’s worth. Lenders usually do not require home inspections except in the case of FHA or VA loans.

What Similarities Do Appraisals and Inspections Share?

Both an appraiser and a home inspector require licensing and training. They are hired professionals to act as impartial third parties. A buyer will typically select the home inspector while the lender selects the appraiser. Unless otherwise specified, the buyer pays for both services. According to Zillow.com, both the appraisal and inspection occur during escrow – AND – appraisal and inspection results allow for negotiations.

What Do Appraisers Look for During Home Appraisals? (According to Uphomes.com)

·       The General Condition of the Home

·       The Home’s Location

·       The Age of the Home

·       The Home’s Exterior

·       Design of the Home

·       Signs of Water Damage

·       Size of the Home

·       Home’s Interior

o   The appraiser spends the most amount of time inspecting the home’s interior by assessing the structure and condition. They will take note of the number of bedrooms and bathrooms and, if there is a basement or attic. Notations will be made regarding the type of foundation as well as materials used for flooring, windows, walls, and will take note of any visible issues within the home.

·       Home Improvements

·       Signs of Infestation

·       Safety Features

What Items Are on A Home Inspector’s Checklist? (According to Lisa Kaplan Gordon-Realtor.com)

·       Grounds

o   Standing water, grading, downspouts, landscaping health, pathways, retaining walls, sheds, and railings

·       The Home’s Structure and Foundation

·       The Roof, Shingles, Flashing, Fascia, Chimneys, and Skylights

·       The Home’s Exterior Materials

·       Windows, Doors, Trim

·       Interior Rooms, Ceilings, Framing, Insulation, Heating Vents

·       Kitchen

o   Proper range hood fans/venting, ground-fault circuit interrupter protection, leaks, cabinet doors and drawers

·       Bathrooms, Toilets, Drains, Showers and Tubs

·       Plumbing

o   Pipes, drains, water heaters, water pressure/temperature.

·       Electrical Systems

o   Wiring/electrical panels, light switches, outlets, and HVAC systems

An appraisal and home inspection are both important processes to protect the home buyer’s financial interest in a home. By making certain that they are making a wise purchase, the buyer can enjoy ‘peace of mind’ that they have likely avoided a large financial misstep. A licensed realtor can assist in scheduling inspections and walking buyers through the process of what will likely be the largest purchase they make in their lifetime.

Sandi Downing Real Estate/Keller Williams

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