The Difference Between An Inspection And An Appraisal
The Difference Between An Inspection And An Appraisal
I have had many clients ask me what’s the difference between an inspection and an appraisal. Often they confuse them as the same thing and ask why they have to pay for both. A quick answer I give is aninspection is for the buyer. An appraisal is for the bank. Yes the buyer does have to pay for both but it is the Inspector that is working in the buyer’s interest to determine if the home is indeed what the buyer is expecting to purchase. An appraiser is working for the lender to determine if the house is worth the money they are about to lend the buyer in order to close on the home. Either way, an inspection and appraisal are peace of mind for the buyer and the lender respectively.
Confused? Here is a working definition of a home inspection. A home inspection is designed to determine the condition of the house on the day of inspection. Major areas of concern should be structural, mechanical, plumbing, roofing, and electrical. Such items as safety, health, water, and fire hazards are of particular concern when determining the livability of the home to be purchased. An inspection is not a guarantee or warranty against unforeseeable future issues rather it is a visual, non-destructive, non-invasive snap shot of the condition of the home on the day of inspection.
It is important to hire a licensed and reputable inspector that will give you the peace of mind that you are buying the house expect it to be. A basic inspection will cost $250 and up depending on the size of the home and the amount of items to be inspected. An experienced realtor will have the names of inspectors they have worked with in the past and can trust. Buyers are under no obligation to have an inspection done or use a realtor recommended inspector. It is important to reiterate again that an inspection is not a guarantee against future issues. It is an operational and safety inspection for the property on the day of inspection.
Do you have to be at the inspection? I am always at my client’s inspections and highly recommend that my clients find the time to be there as well. Theinspector is working for YOU. You may have questions or want to know how systems in your new home work BEFORE you move in. A couple hours with your inspector will give you intimate knowledge of the home you are about to purchase and a head start once you move in. All inspections come with a detailed inspection report with pictures that outlines the condition of all areas of concern and possible issues, recommended repairs, defects, etc. It is this report that is crucial if a buyer wants to come back to the seller with an Inspection Objection asking for issues to be resolved. It is up to the seller if they want to resolve a buyer’s objection at which point the buyer can decide to fix it themselves, live with it, or terminate the contract.
Most buyers elect for a basic inspection however there are situations when additional ancillary inspections are called for depending on the age, type, and history of the home. These are not required, however, I recommend homes older than 40 years deserve a little deeper digging to make sure it is safe and move in read. Additional inspection services include sewer line scoping, radon gas, mold/mildew, meth residue, asbestos, lead paint, septic systems, well test, chimney, and wood destroying organisms. These tests cost extra and it is up to the future buyer if they want to invest above and beyond a basic inspection. Many require specialists that a reputable inspector can recommend.
Hopefully I have clarified the difference between an inspection and an appraisal. If you remember one thing from this blog it’s this: INSPECTORS WORK FOR YOU…..APPRAISERS WORK FOR THE BANK. Happy House Hunting!
Author:Jeff McGahey Phone: 720-309-2059 Dated: August 31st 2015 Views: 698 About Jeff: As a Colorado native, real estate broker since 2006, and real estate investor for over 15 years I ha...
View our latest blog posts in your RSS reader. Click here to access.
Ion Real Estate is a hand-picked team of highly respectable experienced Realtors coming together to work with you. Please contact us anytime with any questions. We look forward to serving your Colorado real estate needs. Our experience and dedicated professionalism ensures our clients have exceptional representation every step of the way. At a time where bigger isn't always better, Ion Real Estate has chosen to remain a smaller, highly focused team in order to provide a level of personal service, attention and consideration to our clients that you simply won't find elsewhere. Our decades of experience in the unique world of Denver real estate positions us advantageously to handle all of your real estate needs
What’s your house style?Looking for a new home is one of the most ex
"My experience with Jim and Ion real estate has amazing. Jim is wonderful to work with. He listened to my challenges and offered suggestion on how to bring my score up to the 640 I would need for a loan to do repairs on the house I am interested in purchasing.
I have been working very hard on making a change in my finances so I can purchase a home in Bailey and it is a pleasure to feel hopeful that this will happen.
I am so grateful to Jim for listening and helping me understand the process.