Whether you’re buying or selling a home in Tampa Bay, you know that you need an inspection and an appraisal. But what’s the difference between the two?
What’s the Difference Between a Home Inspection and a Home Appraisal?
Home inspections and home appraisals are two different things. Each is a vital part of any real estate transaction, though. This guide explains the differences between inspections and appraisals, why you need both, and how much they cost (as well as who pays).
A home inspection is performed by a qualified inspector. The inspector goes through the entire home to check for defects, problems and other issues. After an inspector goes through the home, they provide the person who paid them – typically the buyer, but sometimes the seller – with a full report on everything they found.
Home inspectors typically check everything inside the home, but not inside the walls. For example, an inspector will check doors and windows, paint, drywall, flooring, cabinets and drawers, and everything you can see on the surface. They will also check to ensure that the wiring works, the toilets flush and the sinks deliver water with pressure. However, most general home inspectors don’t inspect entire electrical or plumbing systems, HVAC units or other specialty items, such as roofs, chimneys or swimming pools. If you want those things inspected, you’ll have to pay a specialized inspector to tackle the job.
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A home appraisal is a professional opinion of how much a home is worth. Unlike a home inspector, an appraiser attempt to determine what a home is worth on the current market. They don’t check to see whether systems are working, windows are installed properly, or anything else.
A home inspector’s job is to compare a home with other, similar homes in the same area to find out what the market says about its worth.
If you’re taking out a mortgage to purchase the home, your lender will require you to pay for an appraisal. Usually, the lender chooses the appraiser while you foot the bill. That’s because the appraisal needs to be done, but the lender won’t trust just anyone.
So why does an appraisal need to be done?
Lenders want to know that they’re not giving a borrower too much money. Statistically, when people get in over their heads with a home, they’re more likely to walk away without paying off their full obligation to the lender. Usually, lenders won’t allow you to borrow one cent more than an appraiser says a home is worth.
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Do You Need an Inspection and an Appraisal?
If you’re buying a home, you do need both an inspection and an appraisal. Though you can opt out of having an inspection done, your lender won’t allow you to skip the appraisal.
Who Pays for Inspections and Appraisals, and How Much Do They Cost?
Buyers typically pay for inspections and appraisals themselves. However, it may be possible to ask the seller to absorb some of your closing costs, which include the fees for inspections and appraisals.
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