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Appraisal vs Inspection

appraisal

Two costly items that you might need to pay for when purchasing a home are the inspections and the appraisal. Many people get the two confused. So let’s delve into the similarities and differences between an inspection and an appraisal!

appraisal

Similarities: Both the inspection and appraisal are done within the first two to three weeks of going under contract, and once both of these tasks are performed, you’ll get a report with the findings. An appraisal report is significantly smaller than the inspection report, which can typically run 30 pages or more. But, no worries, your REALTOR will be there to help you understand both of these documents! These two items are also similar in price, here in the Carolinas you can expect to pay between $400 and $500 for each.

appraisal

Differences:

  1. An appraisal is the report you receive from the appraiser showing what they’ve determined the market value of your home to be. That value will determine the amount of money the bank will lend you to purchase your home. An inspection, however, is done to determine the condition of the home. It’s like your home’s report card and is for your information only. It’s never seen by the lender and doesn’t factor into the loan in any way.

  2. An appraisal is required by your lender, only IF you are planning on financing your mortgage. The bank does this to ensure that the property is worth the money that they’re giving you to buy it. So that if you default on your loan, they can sell the house and recoup the money they’ve spent. The upside of this is that it keeps you from paying more than the home is really worth. An inspection, on the other hand, is not required as this is done solely for you to know the condition. While it is not required, I HIGHLY recommend getting one. Your inspector has special tools and training that help him detect things that your untrained eye will miss. So pay the money now to avoid paying boat loads later.

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