What's the Difference Between Home Inspections and Home Appraisals?

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Today, we cover a topic that confuses many people: the difference between a home inspection and a home appraisal. 

Most real estate contracts have both a home inspection contingency and an appraisal contingency. These are completely separate:

• The home inspection contingency pertains to the overall condition of the home and any potential issues with the property. This protects the prospective buyer and can include structural issues, a leaky roof, or faulty appliances. A home inspection typically takes anywhere from 2-4 hours. The idea is to pinpoint any issues with the property prior to moving forward with the purchase.
• The home appraisal contingency is in place to get a licensed appraiser to the property to justify the purchase price of a property. An appraiser will visit the property once it has gone under contract to make sure the sales price is in line with the current market. The appraiser will review comparable sales and review items such as square footage, condition of the property, lot premiums, and other variables that are factored into property values. The goal of the appraiser is to provide a detailed report showing how the sales price was reached in the contract.

We hope this gives you a good understanding of the differences between home inspections and home appraisals. If you have any further questions, or if you would like our assistance, give us a call or shoot us an email. We would be pleased to help you!