Home Inspections vs. Home Appraisals
For first-time homebuyers or those new to real estate, the difference between a home inspection and a home appraisal can be somewhat confusing. Common questions homeowners, buyers, and sellers have include: Do I need both? What purpose do they serve? How do I go about scheduling a home inspection and appraisal? By the end of this article, we hope you’ll have a clear understanding of the difference between a home inspection and a home appraisal, along with some next steps to take.
What is the Difference Between a Home Inspection and Home Appraisal?
While both processes involve a thorough examination of a home, they are quite different in nature. The purpose of a home appraisal is to determine the true value of the home, based on a variety of factors in the home. A home inspection on the other hand, focuses on the property and its components. The goal of a home inspection is to determine the health, safety and overall condition of the home, and help the buyer determine if any maintenance or repairs are necessary.
What is a Home Inspection?
A home inspection is a thorough examination and assessment of the major components of a home, both inside and outside. During a home inspection, a home inspector will inspect items like the electrical panels, foundation, HVAC, roof, plumbing, siding, windows and doors, and more. A home inspection is a crucial step in the homebuying process as it is an opportunity for the buyer to learn of any damage or necessary repairs that will be needed before closing on the home. Should repairs or maintenance be needed, the buyer is then able to potentially negotiate with the seller, but ultimately, buy their home with confidence.
What is the Purpose of a Home Inspection?
The purpose of a home inspection is to identify key issues with the home before buying it, assess repairs and maintenance costs, help avoid unexpected surprises after the home purchase, and give the homebuyer confidence in their investment.
Generally, when a buyer is under contract on a property, they will schedule a home inspection. Should any issues arise from the inspection, the buyer can then decide if they want to continue pursuing the property, negotiate with the seller, or simply budget for the recommended repairs. Home sellers can be proactive by getting a Pre-Listing Inspection done on their home before listing it on the market.
In addition to identifying key issues, a home inspection also gives the buyer actionable insights into the property. The inspection report can help the buyer prioritize repairs and maintenance items as well as give the buyer a better idea the age of critical systems like the HVAC, electrical panels and roofing to help them create a maintenance plan for the future.
What is the Process of a Home Inspection?
The process of getting a home inspection is easy. First, you’ll need to find a local, trusted inspector and schedule your inspection. All WIN home inspectors are certified, licensed and trained to provide home buyers, owners and sellers with top-rated inspection services.
How Long Does a Home Inspection Take?
Typically, a home inspection can take up to 3 hours, but it depends on the size and age of the home. If there are other areas of the property that need to be inspected such as a shed, detached garage, or guest house, additional time may be needed.
When Should I Get a Home Inspection?
When buying a home, the home inspection should take place while under contract, which is after the seller accepts the offer, but before closing occurs. This will give both the buyer and the seller enough time to renegotiate or make repairs should the inspection detect any issues. Additionally, homeowners should continue to have their homes inspected every couple of years to ensure they are still in good condition and to help homeowners avoid costly emergency repairs. WIN recommends scheduling a Home Maintenance Inspection every three years. During a Home Maintenance Inspection, a certified, trained and insured WIN home inspector will carefully examine over 300 items in your home and report their findings within 24 hours in the form of an easy-to-read report complete with actionable insights and maintenance suggestions.
How Do I Prepare for a Home Inspection?
Follow the guidelines below to prepare your home for your home inspection.
- Unlock doors, windows and access panels
- Make sure hallways, doorways and access points are free and clear
- Check the batteries in smoke alarms and carbon monoxide detectors
- Turn on all pilot lights for the stove or water heater
- Make sure all light bulbs are working
What is a Home Appraisal?
A home appraisal is a professional evaluator’s unbiased opinion of a home’s value. A home appraisal is required whenever somebody is applying for a mortgage, buying, selling or refinancing a property. The purpose of a home appraisal is for lenders to ensure that borrowers are not overborrowing on the value of a property. It also provides the lender with a safety net should the borrower default.
What is the Purpose of a Home Appraisal?
The purpose of a home appraisal is to determine the true value of a property and assist in the financing process. The home appraisal is paid for by the borrower and is conducted by the lender to determine if the home’s contract value is appropriate given its condition, features and location. Having an appraisal is the bank’s way of protecting itself from lending more than it could recover should a borrower default on their loan.
What is the Process of a Home Appraisal?
A home appraisal is done to benefit the lender, so they are usually the ones who order it. However, it is usually up to the buyer to pay for and schedule the appraisal. Once scheduled, the appraiser will examine the home and determine its true value based on a variety of factors including location, age, amenities, and average neighborhood home values.
How Long Does an Appraisal Take?
To complete a home appraisal, it generally takes 1-2 weeks, but can sometimes take over a month depending on the appraiser's schedule and time of the year. The appraiser will visit the home to gather information about the property and then analyze it to come up with a final appraised value, which will be available in the appraisal report.
Who Conducts a Home Appraisal?
A home appraisal is conducted by a qualified appraiser acting on behalf of the lender. A home appraiser understands how age, size, location and market trends come together to create an accurate value of a home.
When Should I Get a Home Appraisal?
A home appraisal is necessary during a real estate transaction or when refinancing. When buying a home, the appraisal typically occurs after the offer has been accepted and after the home inspection. If you are selling a home, it’s also a good idea to make sure you have it appraised before listing it on the market. A home appraisal can help sellers understand the value of their home and make an informed decision on what purchase price to list their home.
How Do I Prepare for a Home Appraisal?
While a home appraisal and home inspection are two different services, the steps you can take to prepare your home for them are relatively similar. Follow these tips to better prepare your home for an appraisal.
- Improve curb appeal by making sure the outside area is clean and free of debris
- Clean and organize the interior
- Make minor repairs around the house
- Consider making enhancements to the home
- Research the value of other homes in your area
Whether you are a homeowner, buyer or seller, both home appraisals and home inspections are essential and play an integral part of your homeownership journey. To learn more about home inspections and to schedule an appointment, please contact your local WIN Home Inspector.