Houses are moving off the shelf.
Industry statistics show that sales of previously owned homes across the United States grew by 1.3%. Furthermore, 681,000 new homes were sold by the end of 2019.
For each buyer, getting the home inspected and appraised is critical in ensuring the best value for money. But is there any difference between the two?
Here is an appraiser vs. home inspector comparison to help you understand how they both help you get a good deal.
What Is an Appraisal?
A home appraisal is a process necessary to determine the estimated market value of a house.
Before you close on buying, refinancing, or selling a house, you will need to conduct an appraisal to determine the property’s value. The outcome of the appraisal is what goes into deciding the ceiling amount a lender will let you borrow for the property.
If you are buying a house, an appraisal can help you avoid paying more beyond the value of the home. For refinancing needs, the appraisal helps the lender give you the money that is on par with a house’s value.
What Is a Home Inspection?
A home inspection is the process through which you evaluate a house to find out its present condition and identify any potential issues.
A thorough home inspection will give you information about the state of the roof, foundation, plumbing, and electricals, among others.
A home inspection is critical as it helps you avoid the horrendous mistake of purchasing a home that requires costly repairs. The information you uncover through a home inspection does inform negotiations between a buyer and a seller.
Appraiser vs. Home Inspector: The Differences
While a home inspector and an appraiser might seem like they do the same job, there are some critical differences in their roles. You will have to not only look at what they do but how they do it to understand these differences.
1. How They Do Their Job
When an appraiser visits the property, they tend to do a walk-through of the house. Their goal is to survey the home and come to an accurate conclusion about its real value in light of comparable houses.
When a home inspector shows up, on the other hand, their job is to make a thorough examination of your house. They will prod and analyze various aspects of the property for damage, wear, tear, and other issues that can impact the buyer’s investment.
As a result, a home inspector’s checklist is much longer than an appraiser’s and may take several hours to go through.
2. The Client They Serve
An appraiser works on behalf of the lender to help them determine if they should back the loan for a house. That makes an appointed appraiser legally bound to act as a neutral third-party.
An inspector, on the other hand, acts on behalf of the buyer in finding out what condition the house is genuinely in before they buy it. As such, their role is to protect the buyer’s interest as they consider purchasing the property.
If a buyer needs a home inspection done, they have to set it up themselves. For an appraisal, though, a lender will order it for you.
Additionally, the seller and buyer do not take part in an appraisal walkthrough. Only the professional appointed by the lender conducts the process.
Home inspectors do encourage potential buyers to attend the evaluation. That way, they can discuss any issues that arise in real-time for the buyer to have a clearer picture of the situation.
3. The Point in Time They Execute Their Duties
When a seller and buyer enter into an agreement over the sale of a home, the buyer has a window in which they can complete the necessary inspections. If the deal is contingent on these inspections, then the buyer will need to complete any checks during this period.
The exact number of days for the window period for inspections can vary depending on what both parties agree to.
Once the buyer looks over the results of the inspection and is okay with them, then the appraiser can step in. The lender will hire a professional of their choosing who can then come and complete the walkthrough to help value the property.
If a buyer is thinking of having the appraisal done before an inspection, a lender will tend to discourage them from such a plan. That is because an appraisal is of little value if you don’t know the actual condition of the house.
The bank may appraise it only for you to do an inspection and realize the house is a lemon. As a result, the buyer will have wasted the appraisal fee and increased their overall costs.
4. Room for Negotiation
A marked difference in what an appraiser and an inspector do is the ability (or lack thereof) to negotiate. Once a home inspection is done, if the buyer is not satisfied with the results, they have room to negotiate. They can either ask the seller to make the necessary repairs or reduce the selling price of the house.
Such is the importance of this step in the transaction that you should select a realtor who has proven prowess in negotiating issues after an inspection.
Across the divide, if any concerns relating to the home’s value arises once the appraisal is done, there is no room to negotiate. When an appraiser undervalues your home, that’s it. They act as an unbiased third-party by law, and as such, their opinion is considered objective and valid.
In such instances, your lender will require you to make up the difference between the appraisal value and the selling price out-of-pocket.
5. The Time They Take to Complete the Job
A home inspection, in general, can take between two to four hours to complete. Since the inspector will bring on board specialized professionals to conduct different aspects of the house inspection, the process might take several days.
An appraiser typically takes between 30 to 60 minutes to conduct the evaluation, depending on the size of the home. Although they do examine some details, they will not look into the minutiae as an inspector will.
Get the Best Deal
The real estate sector is more buoyant today after sufficiently recovering from the 2008 financial crisis. For those on the buy-side of the market, getting a good deal on the house involves many processes.
When it comes to assessing the house, you need to understand the appraiser vs. home inspector difference to learn how they can ultimately help you settle on a good investment.
CLASS Home Inspection offers detailed inspection services that protect your interests. Schedule an appointment today for a home inspection service that goes the extra mile for you.