What’s the difference between an appraisal and an inspection? Let’s find out.
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Sellers always ask me, “What is the difference between an inspection and an appraisal?”
Simply put, inspections verify a home’s value while appraisals verify its condition. Inspections are ordered by the homebuyer during their due diligence period. During an inspection, a professional home inspector will visit your property to assess everything from the plumbing to the electrical sockets.
Once they’re finished, they’ll draft a report of their findings so as to alert you (and the buyer) of any issues they noticed. Then, if necessary, you and the buyer will negotiate repairs before proceeding with the deal. In short, inspections are intended to provide the buyer with peace of mind, and to ensure that the home is in liveable condition.
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Inspections verify a home’s value while appraisals verify its condition.
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Appraisals, on the other hand, are designed to give the buyer’s lender peace of mind. Just because you and the buyer have agreed upon a certain price, that doesn’t mean your home is actually worth that amount. To ensure that they aren’t lending the buyer more money than the home is worth, the bank their lender is associated with will send a third-party appraiser to objectively assess the property’s value. Assuming the home appraises for approximately the same value as your list price, you and the buyer can go ahead with the transaction. Even if the appraisal doesn’t go through, though, you still have options. If you’d like to discuss what these options are, feel free to reach out to me.
And, as always, if you have any other questions or would like more information, please give me a call or send me an email. I look forward to hearing from you soon.
