According to the American Society of Home Inspectors, a home appraisal and home inspection involve different criteria. Both the appraisal and inspection are relevant to completing the purchase or sale of property. The appraisal recaps the home’s assessed value and an inspection reveals the home’s condition. Here are the basics:
A homeowner or prospective buyer may hire a licensed appraiser of real property in order to assess a home’s value. However, real estate appraisal is most frequently paid for by the buyer when the bid to purchase the property is accepted by the seller. The licensed appraiser completes the assessment based upon the home specifics and recently sold, similar properties sold in the past six month period.
The appraisal satisfies dual needs of the buyer and his or her lender in determining the home’s fair market value. Some lenders must receive an appraisal that is minimally equal to the selling price or, ideally, greater than the seller’s original offering price. Many agents recommend a contingency clause in the contract to the seller for this reason. If the home appraises at a lower price than the seller’s offer, the buyer isn’t committed to purchase.
Qualified, licensed inspectors perform home inspections before the home may pass title. As above, the buyer’s offer to the seller may include a contingency clause about the inspection’s results. For instance, if repairs are identified during the inspection, the buyer is likely to request their execution before closing the sale. The American Society of Home Inspectors recommends that homeowners have regular inspections every few years to help maintain the property.