Para español click: Valuación o avalúo vs. inspección
By Carolina Loreto
Prospective buyers often need clarification about the difference between a home inspection and an appraisal. Appraisals help you understand a home’s value, while inspections will help you understand its physical condition and integrity. Knowing the difference between both terms might help during the closing process.
A home appraisal is performed by a licensed appraiser who estimates a home’s fair market value. It’s common for mortgage lenders to require an appraisal before approving you for a loan. They seek assurance that the loan amount doesn’t surpass the property’s value, allowing them to recoup their investment in case of a buyer’s loan default.
To determine the value of a home, an appraiser factors in the home’s location, its condition, and the value of similar houses recently sold in the area. These are also known as comparables or comps.
Once a buyer has made an offer, they can hire a home inspector, a professional licensed or certified by the state, to thoroughly investigate the property’s condition and reveal any issues requiring repairs.
During the inspection process, a home inspector will examine the structure, roof, attic, plumbing, electrical system, and anything else that can affect its value. Even though the buyer doesn’t need to be present during the home inspection, we highly recommend it. The inspector can walk through the home and explain the severity of any issues they discover. However, an appraiser won’t tell you their findings until they complete their report, which will go directly to the lender, but the buyer can request a copy of that report.
A home inspection is a tool that can protect the buyer, and the results allow a buyer the opportunity to request a price decrease/credit on the purchase; ask the owner to make repairs to fix any issues, or decide if they want to walk away and find another home to purchase.
In a real estate transaction, home appraisals and inspections benefit the homebuyer, home seller, and mortgage lender to guarantee the value and safety of the home.