This is a common question home inspectors receive from home buyers. Both are critical components of the home-buying process but vary considerably in purpose and process. In this article we will discuss the role of each, how they differ, and similarities between the two. By the end, we hope you are one step closer to home ownership in Johnson City, Kingsport, Bristol, and surrounding areas.
The Purpose of a Home Inspection
Home inspections are one of the most important steps in the home-buying process. Purchasing a home is a huge investment. A good home inspection will help ensure it is a wise one! As a home buyer, you will select a home inspector to assess the condition of a home. We aren’t determining the value of the home. However, we will identify issues that could significantly affect the value of the home. Once you receive the report, you are able to gauge whether or not the purchase is right for you. The inspection report can also be used to renegotiate the price of the home or to request the seller make repairs prior to closing.
The Purpose of an Appraisal
A home appraisal purpose is to determine the objective value of real estate. In a transaction, this is often required by the lender to ensure the home could be sold as collateral for the amount of the loan in the case that a buyer was unable to pay their mortgage. If the buyer is not using a loan to purchase the home, an appraisal is not required. However, the buyer still may choose to pay for one.
Similarities and Differences
There are some similarities between appraisals and home inspections. Both services must be performed by licensed professionals who have undergone specialized training. Here are links from the TN Department of Commerce that describe licensing requirements for appraisers, and home inspectors. Additionally, both are needed during real estate transactions. Lastly, both serve the purpose of helping buyers make sound financial decisions.
On the other hand, there are some significant differences. While home inspectors are looking at the condition of individual systems in the home, appraisers are looking at the superficial condition of the home. Additionally, appraisers focus more on recently sold homes in the surrounding areas, to determine the value. Home Inspectors do not consider surrounding homes’ value when inspecting. We assess the home’s condition through the same process regardless of the housing market.
Wrapping Things Up
As you can see, while there are some similarities between the services, appraisals and home inspections serve very different purposes. Both are critical when purchasing a home, but are performed by different companies and adhere to individual sets of regulations. Now it’s time to schedule your home inspection! Give us a call, or use the link below to schedule your home inspection today!