Some questions we hear often are “What is the difference between an Appraiser and a Home Inspector?” And “Do I need both?”
First, on the second question, the answer is yes!
Answering the first question will explain why:
An Appraiser comes to the property to make a visual assessment of the value of the property you are wanting to purchase. Typically this is done for the bank or lending institution to determine if the home is worth the market value that the buyer has offered to pay. The bank wants to make sure the home is worth at least the amount they are being asked to finance. The appraiser looks at and takes photos of the interior and exterior of the structure. They look at the land value and size They check for any modifications made on the home. And they compare the home versus other similar homes sold in the area within a given time frame. All of these factors determine the estimated market value of the home you are wanting to purchase. Appraisers make educated estimated guesses on the home’s value. Banks require appraisals to fund a loan on a property and home.
A Home Inspector comes to the property to make a visual and non invasive examination of all the systems and components inside and outside the home. A home inspector takes many photos and readings, using proper tools and education, and provides the prospective home buyer a detailed report outlining any issues or concerns found. The bank does not require a home inspection, but most realtors and clients do as it is a vital part of the home purchase transaction. Home Inspectors make educated observations on the home’s safe function and operation.
Putting it simply, an appraisal tells you how much something is worth, its value, and a home inspections tell you if that something is functioning properly.
Both services are an important and necessary part of the home buying process.