Buying or selling a property is a serious business. It is in both parties’ best interest to reach a satisfactory agreement. In order to successfully conduct such a contract, 3rd parties are required to be the mediator.
You can never be sure that you’ve got a fair deal if you don’t include a professional opinion, in other words, you need a home appraiser and a home inspector.
At first, it might seem that there’s not a big difference between the two, but we’ve consulted guys at The Inspectors Company to explain the difference and why both of them are necessary.
Home appraisal
Home appraisal is a process in which an appraiser goes out to see the property and determine the market value. He or she are usually hired by a financial lender (a bank who lends the money to the buyer for example) because it is crucial to hire someone coming from a neutral ground to give an objective report.
The job consists of determining a price of a property, and a few factors are taken into consideration here: current state of the real estate market, prices of homes in that particular neighborhood, prices of houses of similar size, age and location, etc.
The appraiser needs general info like square footage, number, and layout of rooms, any visible damage that can affect the price and then compare the findings with the official records.
The appraiser then comes up with a final price and generates a report in which you can read the thought process step by step, where it is explained in detail how the price was established.
Home Inspection
A home inspection is pretty similar to home appraisal in terms of the purpose. They both evaluate a property in their own way but with a different mindset.
The home inspector also sets out to see the house but goes into much more detail. The goal is to thoroughly investigate the house and determine the current condition it is in. He sets out to get a detailed report and basically advise the buyer whether the property is worth investing in.
They will check roof, walls, foundation, ceilings, plumbing, focus on the entire house and all of its systems and give their professional, unbiased opinion.
A home inspector is expected to be hired by the buyer, but it is not unusual for the seller to make the initiative and hire his own investigator in order to leave an impression that they are all about honesty and transparency.
Either way, best property inspections are there to deliver a detailed report on the current state of affairs of a property and to help make the final decision.
The Difference
You can say that there’s not a big difference between home appraisal and home inspection, as they both serve a similar purpose. They both go out to see the property and investigate and they are both considered unbiased.
The actual difference is that home appraisal is there to come up with the real value of a property whereas home inspection job is to thoroughly investigate and present the buyer with objective findings, pros and cons, possible risks, and advice if needed.
While the inspector is literally interest only in the house and the state it is in, the appraiser will gather information about the neighborhood, traffic, crime rates, parking, nearby schools and facilities because all those factors can affect the final price.
Both are equally important to get the best outcome with the most accurate information. It is also important to note that one person should not do both the appraisal and investigation.
Therefore, you shouldn’t use investigator’s report to determine the price, because it does not include current market value and comparison with similar real estates.
