Inspections and appraisals are not the same. Here’s how they’re different.
What’s the difference between appraisals and inspections? When purchasing a home, you can get an appraisal and a home inspection done during the due diligence period. They sound like they’re kind of the same. So what are the differences, you may ask? An appraisal is mostly concerned with the value of the property. A home inspector is only concerned about the condition of the property.
Even though an appraiser will check the condition of the property and may even require repairs to be done to satisfy regulations, appraisals are there to help determine the value of the home and make sure the lender isn’t going to loan more money on the property than it is worth. They’re going to determine the value of this home that you’re trying to buy—usually by finding recent comparable sales.
On the other hand, a home inspector’s job is to go through from top to bottom and find anything that’s wrong with the property. They look at the heating and the air conditioning, the shingles on the roof, and the electrical and plumbing systems. They are a lot more thorough with their inspection, yet they are not there to give an opinion on value. Over the years, I have seen home inspection reports go from one page to 200 pages, and in almost every case, they find things that nobody even knew were happening to the house.
Another big difference is that appraisals are generally a requirement when getting a mortgage. Home inspections are always optional, although highly recommended. The depth of an appraisal can change based on the type of loan the buyer is getting from VA or FHA loans or conventional loans. There are different requirements set forth by the government, and it is possible for the appraisal to delay the closing if they find problems that would fall under the guidelines. Whereas in a home inspection, the buyer and seller can freely negotiate with each other about those repairs.
I hope that helps you understand the differences between appraisals and inspections. As always, feel free to call me at any time at (901) 591-8100. I look forward to hearing from you.