Home Inspection vs Home Appraisal

Are they the same? How are they different?

Both are equally important and part of a home purchasing process. 

Many people would agree that home is one of the biggest investments in their lives.

It is wise to have these two protection in place before going through with a home purchase. Home Inspection and Home Appraisal would happen consecutively, inspection(s) first followed by the appraisal. Sometimes the homebuyers may

choose to skip the home inspection process and only choose to obtaining the

appraisal report during escrow.

Home inspection helps you find out the current state or condition of the home.

A property may appear turnkey and well maintained, visually we won't know its'

actual condition until a home inspection is thoroughly performed. Sometimes

homebuyers or investors would choose to skip the inspection process when they plan

to tear down or rebuild the property. Another scenario where the buyer might feel confident waiving the inspections on a brand new property. Often times when buyers

are competing against multiple offers, they would opt to waive the inspection contingency. Whatever the reasons maybe, having the home inspected protect the buyers and inform them about the condition of the home, if any repairs would be needed and the estimate costs for the repairs . Even a turnkey or new-built home may have some items that were overlooked or not installed properly. This is the time to have everything inspected, checked thoroughly and re-negotiated before closing.

Having the Home appraised determines the value of the home and informs the buyer if the property is worth the value of their offer price. Often in multiple offer situations, buyers would go over the value, not realizing the property does not appraise to what they're willing to pay. To prevent buyer remose later, this is the time to find out the real value of the property.

If a buyer is obtaining a loan to purchase a home, the lender will require to have the property appraised as part of the process to determine the value before approving the loan to the borrower. As a buyer, you want to make sure that the property is appraised at the value you’re offering. If the value comes under, buyer still has the option to proceed or pursue the property by covering the cost of difference in value price. Lenders would only grant the loan amount based on the appraisal price. As a buyer, you could also request to appeal or get second appraisal at your own expense.