This is a question that often comes up during the home buying process? While they both are used to protect the home buyer, that is where the similarities end.
What is a Home Inspection?
The home inspector is a 3rd party hired by the buyer to complete a thorough review of the property and all of its major systems. The inspection is completed early in the escrow period while the buyer is within their contractually agreed contingency period (typically the first 17 days of escrow in California). The inspection is not required but is highly recommended to anyone buying a home.
During this process, the inspector checks out every facet of the home from the roof to the foundation to the electrical and plumbing and everything in between. It is a good idea for buyers to attend the inspection so that the home inspector can walk them through their findings so any issues can be seen first hand. The key thing to note during these inspections is that the inspector isn’t there to tell you what must be fixed. Instead, they are there to make you aware of what is/isn’t functioning properly so that you are aware of any issues with the home. From there, you can decide if you are willing to accept the condition or if you need to negotiate repairs with the seller.
Keep in mind, it’s completely normal for a home inspector to find a list of items that need to be addressed. It really comes down to whether you are okay with the items uncovered or if you want the seller to address anything that was brought to light during the process. Once you decide how you would like to proceed, you can work with your Realtor to present a Repair Request to the seller and their agent.
What is an appraisal?
An appraisal is also a professional inspection of the home completed by a 3rd party. Unlike the home inspection, the appraisal is required by the lender whenever a property purchase is being financed. The appraiser is selected by an appraisal management company chosen by the lender. The process also takes place during that initial 17 day contingency period. During the appraisal inspection, the appraiser reviews the condition of the home, confirms the bed and bath count as well as measuring the square footage of the home and taking pictures of each room as well as the exterior. After visiting the home, the appraiser will drive the neighborhood to confirm the comparable sales they intend to use are in fact comparable to the subject property. After all the field work is complete, the appraiser will enter that data, along with data of comparable homes in the area, to help determine the current market value of the home. The appraisal is a tool for protecting the lender by insuring the home value is sufficient to secure the proposed loan. At the same time, the appraisal is a valuable tool to provide you with peace of mind that you are not overpaying for your new home.
Want more information on the Home Buying Process?
While there are other differences between the appraisal and home inspection, these are the most common and of greatest interest to you as a buyer. If you have additional questions or would like to discuss the topic in more detail, please give me a call at 714.376.2711. If you have general questions about market conditions or other real estate topics, please check out my Facebook page or my other videos on Youtube. As always, I appreciate you taking the time to watch/read and I look forward to seeing you again soon. Make it a Great Day!!