The real estate market in the Upper Peninsula is heating up as the busy summer season kicks into full gear. With so many new buyers jumping into the market, we’ve been getting one question quite a bit at the U.P. Home Inspection headquarters:
“What’s the difference between a home inspection vs. appraisal?”
If you, too, have been wondering about this, read on! In this blog, we’re going to unveil:
- The differences between a home inspection and appraisal
- The similarities between a home inspection and appraisal
- Why they both are important
- What happens during each
- And finally – how you can leverage the information and insights you receive from your appraisal and home inspection to secure the best real estate deal possible.
So, if you’ve been wondering about appraisals vs. home inspections – buckle up! We’re going to clear up any confusion or questions you may have.
How Do Appraisals and Home Inspections Differ?
Appraisals and home inspections serve different purposes. An inspection reveals the condition of a home you are buying or selling, whereas an appraisal determines the value of a home. Let’s dig a little deeper to examine the key differences between an appraisal and an inspection…
- Appraisal: An appraisal is more of a general assessment of your property’s value in comparison with similar properties on the market. It will involve a licensed professional appraiser performing a short walk-through and a general assessment of the home.
- Inspection: An inspection is a deep dive into the current condition of a home. Taking up to several hours, a home inspection is a much more in-depth procedure. Ideally, this process will be conducted by a certified home inspector both visually and by testing the functionality of major systems. At the end of your home inspection, your home inspector should provide you with a detailed report indicating any repairs that should be completed before closing the deal.
How Are Appraisals and Inspections Similar?
Appraisals and home inspections are entirely different processes – but there’s one thing both of these important services share: they both give you insights you need to be sure your next real estate deal is a smart one.
As we previously mentioned, a home inspection will bring to light any repairs that should be completed before closing. But sometimes it’s not possible to complete them before the sale. In that case, you may leverage your home inspection report to negotiate down the price of a property to account for the cost of necessary repairs.
Do Lenders Require Appraisals or Home Inspections?
If you’re not putting in a cash offer, keeping your lender happy – and adhering to their requirements – is a vital part of the home buying process.
- Appraisals: The short answer is “yes.” Lenders want to protect their investment; therefore, an appraisal will usually be required before closing.
- Home Inspections: The short answer here is “sometimes.” If you’re using a V.A. or FHA loan, an inspection will be required. But here’s the thing: Your lender isn’t the only one with an investment at stake. You do, too!
During our inspections, it’s not unusual to catch sneaky problems that would have cost our clients thousands of dollars. This information is absolutely essential to have before putting in an offer. For a small investment, it should never be skipped – even if your lender doesn’t require it. And, as mentioned above, an inspection can actually more than pay for itself in negotiating your home sale.
For more information on the TRUE cost of a home inspection, please read our blog HERE.
What Happens During a Home Appraisal?
During an appraisal, you can expect the following:
- Your licensed appraiser will review comparable home sales in your area.
- Next, they will walk through your property and take note of the condition of your property. Remember, they will not examine any of the home’s main systems or verify if they are functioning as they should – this is just a light (and mostly visual) assessment.
- Lastly, they will provide you with a report stating the fair market value of the home.
What Happens During a Home Inspection?
Once the ink is dry on a contract between you and the seller, a home inspection is the first thing you should do. In order to provide a comprehensive report of the condition of the home, your inspector will thoroughly examine and test the functionality of the home’s critical systems, including:
- Roof condition
- Water damage systems
- And more!
You can expect this process to take 2 or more hours, depending on the size of the home. Once he leaves the home, your inspector will compile all notes, photos, and/or video footage of the property into a comprehensive report that details the condition of the home.
At UP Home Inspection, we pride ourselves on offering our clients the most comprehensive reporting available in the UP. Our reports are delivered digitally for convenient online access across any device. They are fully searchable, prioritized to help you plan and budget for repairs, and include handy links to additional information to help you resolve maintenance issues properly.
- For more information on what our buyer’s inspection, seller’s inspection, and home maintenance inspection include – please click HERE.
Schedule Your Home Inspection Today
According to Zillow, 83% of home buyers scheduled a home inspection before closing. If anything, that number should be even higher! After all, a home inspection allows you to get the best deal possible on your dream home or property while guiding you through this uber-important decision with eyes wide open.
If you’re thinking about buying a property, have already been looking, or are already in escrow – we encourage you to schedule an inspection with U.P. Home Inspection LLC today! The sooner you get this critical step off your plate, the sooner you will be able to settle in and make your new house a home.
>>Schedule your inspection today with Rich Beasley of U.P. Home Inspection LLC. by CLICKING HERE or by giving us a call at (906) 360-3879.<<