Buyers, this is a common question I get: what is the difference between a home inspection and home appraisal?!
So here it is:
A home Inspection: If you are fortunate to get one these days… you should at least be doing a pre-inspection or able to view a seller’s inspection although we can go over if you should be satisfied with that or not another time…
Anyway, a home inspection is done by a third party of your choice and it is a limited exam of the condition of the home. Back in the good old days this was done after your offer was accepted.
A home inspector will go through the house with a fine tooth comb and bring attention to issues you may not have noticed; i.e. leaking pipes, electrical issues, roof condition and leaks, furnace working properly, crawl space issues and so much more.
Based on the report, you used to be able to negotiate any major deficiencies with the seller. Something to note, this is not a material items repair list, you have to replace the outdated bathroom faucet on your own 😉
Once an agreement has been met or in worst case an unresolved issue and the buyer can walk away with earnest money, the home purchase moves forward to the….
Home Appraisal: This is also done by a third party and an expense the buyer takes on that the lender requires to make sure the value of your home will be sufficient to your loan amount.
A common misconception is that these are similar or the same. I hope I clarified that they are two different parts of the home buying process.
To not go into what an offer scenario looks like these days… Many home inspections are waived or pre-inspected which the waived inspection can come at a very high risk to the buyer and even the seller.
Obviously if you buy with cash, there is no appraisal and it has been known to be waived in instances but there are many other factors to determine that so don’t expect that.
If this was helpful, feel free to like or save! If you have any questions, let’s chat!