Appraisal Vs. Home Inspection

Appraisals and home inspections are both carried out during the sale of a house. Though they both involve a trained professional taking stock of a house, they are performed for distinctly different reasons.

Appraisal

The appraisal is concerned with determining the market value of a house. Mortgage loans are often conditioned on an appraisal; lenders won't put up more than a house is worth. The appraisal can also prevent the buyer from overpaying for a house.

Inspection

The home inspection is aimed at revealing the physical condition of a house. Buyers get a home inspection to reduce the chance of "surprises" after they take possession of the property.

Appraisal Factors

Key factors in an appraisal are the square footage of a house, its general condition, its permanent fixtures, the number of bedrooms and bathrooms, and the value of comparable properties in the area.

Inspection Goals

The home inspector isn't as interested in the value of a home, as whether it has hidden problems. An appraiser may note the presence of a gourmet kitchen; the inspector will actually test all the appliances.

Contingencies

Home buyers frequently make their offers contingent on the house being appraised for the sale price, or close to it, as well as on the seller fixing any problems found in an inspection. Such contingencies allow them to back out of the deal without penalty if problems arise.

References

• All Area Appraisal Affiliates Network: Appraisal FAQ
• American Society of Home Inspectors
• ForSaleByOwner.com: Selling Your Home