What is Appraisal and Home Inspection

Buying a house is perhaps the most important thing in a person’s life, and it needs your full attention before you make a decision. It is imperative that you find out everything about the property you are about to buy before you make the purchase. There is no shame in asking questions about something which concerns you. The main objective is to be satisfied about the condition of the house and its price before you spend your money.

In order to get maximum information about the house you are about to buy, you first need to understand the difference between appraisal and home inspection.

An Appraisal

Here the lending institution gets to determine if the house, which is about to get purchased, is suitable for mortgage. A lender will most probably prefer an assessment by a third party regarding the market value of the house. This will help the lender assess whether the house will suffice as collateral for the mortgage.

In short the main objective of this whole exercise is to get the most accurate estimate of the age, condition, and remaining economic life of the property so that a suitable mortgage agreement can be drawn up.

In an appraisal a detailed inspection of the house is not conducted and the focus is mainly on ascertaining the market value of the house.

A Home Inspection

In a home inspection priority is not given to the value of the property, and the focus is on providing an assessment of the physical condition of the house about to be purchased by the buyer. The inspection is performed by a well-trained home inspector, who knows exactly how to conduct a thorough inspection in order to accurately determine the current state of the building. The inspector will pay special attention towards the roof, structure, heating, plumbing and electrical systems etc. It is this report which will actually disclose if the building is fit to house a family.

If there is some repair work which needs to be done, a good inspector will actually give you the estimated time these repairs will take and what they will cost. It is his job to make a list of all the repair and maintenance work which needs to be done.

A home inspection report can help you decide whether the asking price is reasonable and how much you will be spending on maintenance after purchasing the house.