Both an appraisal and a home inspection are important steps of the home-buying process, so it’s well worth your effort to distinguish the differences between them and how they can uncover detailed information about the home’s value and condition.
Essentially, home appraisal is a survey activity performed by a professional in order to develop an expert opinion on the market value of a real estate property. Home appraisal is usually done for a lending company or a bank as a prerequisite for the approval of a mortgage application by a homebuyer.
The essential elements of a home appraisal report include information and data related to the overall condition of the property, the neighbourhood, variables that contribute to the sale of similar homes and the time spent in selling similar properties. The appraisal report ay be presented as a comparable sales analysis or a cost assessment of value.
A home inspection is not used to determine property value, but will provide an assessment of the physical condition of a property. A well-trained home inspector will perform a comprehensive visual inspection to determine the condition of the building and all of its major systems (roof, structural, heating, plumbing and electrical systems, etc).
While an appraisal is intended to provide the lender with sufficient information to decide on mortgage financing, a home inspection will hopefully reveal to a potential homebuyer whether the building and its systems are in sound working order.
If there are outstanding issues, a good inspector will provide the potential purchaser with a schedule outlining the estimated costs and a timeline detailing when these repairs will need to be completed.Author: Greg Martel
Greg Martel is the Mortgage Broker Expert/Owner of Harbourview Mortgages in Victoria, BC.