The main difference between a home appraisal and a home inspection is that an appraisal deals with the value of real estate, while an inspection deals with the condition of the home. One helps the buyer assess the value of the investment, and the other helps the buyer assess the risk of he investment.
While the home inspection process ends once the inspector examines the details of the home itself, an inspection is only the first part of an appraisal. Ideally, an appraiser formulates an unbiased, accurate opinion of the value of the property for the lender. They’ll even take it one step further by reviewing comparable properties to determine the home’s value, as well as considering factors such as nearby school zones, crime rates, lot size, and boundary surveys.
A home inspection is much more thorough than an appraisal. It may last up to three hours, significantly more than the simple walk through of the average appraisal.
In most cases, a home inspection happens before the buyer’s purchasing decision, while a real estate appraisal happens after a buyer already submits and offer. If the appraiser’s value is less than what the buyer offered for the home, the seller might reduce the purchase price.
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