If your bathroom is newly remodeled and your home is ready to be put on the market, it’s time to understand the key differences between a home appraisal and a home inspection. While home inspectors and appraisers look at some of the same things, the two professionals have distinctly different purposes: one determines the current value of a home, while the other seeks out any potential flaws or defects within a home prior to a sale. Although both generate reports that are crucial in the home-buying and –selling process, each one has a very specific purpose.
What is a Home Appraisal?
Typically ordered by lenders, a home appraisal is used to determine a home’s market value. The lender hires an appraiser to visually inspect a home for improvements or deficiencies which may impact the home’s overall value. From there, the appraiser takes the home’s location, square footage, and the selling prices of similar homes into consideration and helps the lender determine how much to lend against the home. This way, a lender is confident that they’re not lending more than the home is actually worth, which can result in a negative equity situation.
The focus of home appraisers is to determine the value of a property. The appraiser considers the age of the house, quality of the roof, mechanics, and the type of foundation when coming up with a number. Typically, appraisers give more value to homes with swimming pools, beautiful landscapes, or high-quality bathrooms with tiled showers and marketable bathtubs. Some appraisers may use a standardized value list for home features, while others make judgments based on their experience.
What is a Home Inspection?
Home inspectors make a detailed investigation of the home without making any assessment of the worth of the property. Things like water damage, mold, and termite damage are pointed out during an inspection, and any deficiencies in any of the home’s systems will be noted on an inspection report. As a home seller, it’s important that everything in your home is in working order. If you know your air conditioner doesn’t work or that your water heater is failing, this will be noticed during an inspection.
Although a home inspection is not required in most closing processes, it’s highly recommended and should be prepared for. If possible, plan to be present at the inspection. If the inspection report includes area that need attention, you can either renegotiate the price or take your home off the market and fix the issues. Either way, home appraisals and inspections will help you determine the value of your home and decide which areas of your home need improvement.