What is the Difference in a Home Inspection and an Appraisal?
The homebuying process includes many steps which can feel confusing. At Kenco Home Inspections, we want you to have confidence as you go through the steps to purchase a home. Two important elements when buying a home are the appraisal and home inspection. While these tasks have some similarities, they serve two very distinct roles.
What is a Home Appraisal?
When you purchase a home with a loan from a mortgage company, that company requests an appraisal to determine the market value of the home. An appraisal ensures that the loan amount does not exceed the value of the home. If the amount you request to borrow is greater than the market value, the lender won’t approve the loan.
For the appraisal process, the appraiser visits the property to determine if the written description of the property matches the actual property. For example, does the home have the correct number of bedrooms, is the basement finished and is the lot size accurate. However, this is only one portion of the appraisal.
The appraiser also researches the current market conditions, the property’s sales history and the value of comparable properties. Based on all the information, the appraiser sets a value for the home. The appraisal process in impartial and simply evaluates the data to make the assessment.
What is a Home Inspection?
The homebuyer requests and schedules a home inspection to determine the current condition of the property. A home inspection is not required to close on the home. However, it works to the buyer’s advantage to schedule a home inspection.
When purchasing a home, the sales contract provides timeframes for each step in the homebuying process. This includes a deadline for the buyer to request repairs from the seller. It’s important to schedule the home inspection before the deadline so that the buyer knows what repairs to request. If the seller refuses to make the repairs, the buyer has the option to walk away from the deal.
The goal with the home inspection is to understand the risk of purchasing a property. You don’t want surprises after you close on the deal. For example, you don’t want to find out the HVAC doesn’t work or the garage won’t open. A home inspection protects the buyer’s interests.
Why You Need a Home Inspection
The mortgage company makes sure an appraisal occurs prior to the closing. With a home inspection the buyer must act, including covering the cost of the inspection. However, finding one issue with a home that the seller repairs will likely cover the cost of the home inspection.
You don’t want to skip this important step! A home inspection includes a thorough review of your home’s visible structures and systems. Also, you can schedule specialized inspections for a deeper look into specific areas, like a radon test or a swimming pool inspection.
Make a smart choice for your financial future by scheduling a home inspection for your new home. Kenco Home Inspections offers full home inspections in Southeast Florida. We have a positive reputation for trusted and reliable service.