Skeletons in the Basement? The Difference between an Inspection or Appraisal.
Emily Morgan | May 22, 2018
Hopefully there aren’t any real skeletons in your basement, but just in case maybe you should take care of them before the inspection! Next to getting married and having children, buying a home is like starting a new adventure.
So why not know what you’re getting yourself into?
That’s what an appraisal and home inspection are for. Both have similar processes, but are designed for completely different purposes.
The primary mission for the appraisal is to protect the lender. They are hired to survey the physical conditions of the home and disclose the problems to the buyer. The lender doesn’t want to invest in an overpriced property; therefore they hire an appraiser to look at multiple things. Such as location, proximity of schools and other public facilities, size of lot and condition of home, sales of comparable properties and more. Appraisers are trained to look for signs like chipped paint, broken windows, cracked walls and anything else that might cost a lot of money to fix and hinder the sale of a home.
Now, if you’re like me and you’re still learning, you’re probably wondering, isn’t this something the inspector does? Most people look at me like I’m crazy, when I ask that. But when they stopped laughing, I finally got a hard NO.
A home inspector focuses on the condition of the home, while the appraiser focuses on the value of the home. The inspector’s main goal is toe educate the buyer about the condition of the home and any major components. They look for both existing problems as well as the potential for future problems.
Before you start jumping to conclusions, here’s a little more information for you.
- Yes, you can choose your own inspector.
- Yes, you should do plenty of research before choosing one.
- No you don’t have to address every issue in the report, BUT you are recommended to make a home contingent just in case.
- Make sure your contingent is in writing so major issues can be noted and you have the ability to renegotiate price, require to make repairs or back out.
- No it doesn’t necessarily add to the value of your home by making improvements
- Assessed Value is what the local tax assessor believes your property is worth
- Appraised Value is the opinion of the qualified appraiser.
- Fair Market Value is the most competitive price a buyer is willing to pay and lowest price a seller would accept.
- Zillow Value is an online evaluation only. This is not reliable and should not be used as a basis for your properties value.
- No, the better the home doesn’t always mean the best price. Homes are prices on their area and neighborhood.
- Yes, you are better off as the low man on the block. Being surrounded by higher priced homes brings up the value of your home. Location, location, LOCATION!
Life is all about adding value. By creating a sense of worth, the importance of that thing or idea becomes greater. Obviously, the same idea is portrayed with a home. By adding value to your home, you are increasing your chances of getting it sold, but it has to be in the right way. Adding value to your home can be tricky, though each state had guidelines for this, it doesn’t necessarily mean they are the same. It also means that every buyer and seller is different. Because we value each other’s uniqueness as humans, we find it harder and harder to agree on everything else. So one person may value the kitchen being small and intimate, while another can’t wait to remodel it and make it bigger.
Will it add value either way? Yes. But when it comes down to the ultimate decision maker, the inspection and appraisal will have a large say.