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Difference between an Appraisal and a Home Inspection

By Lesley Freese

A licensed professional is combing through your home, taking note of its size and amenities, jotting down observations about the condition of the property. This is a home inspection, right? Or is it an appraisal? Certainly, these two procedures are similar enough to cause some confusion, but there are several key differences between them.

An appraisal is a survey of your home, conducted by a professional, to determine the property's true value as compared to other properties. The appraisal report details the condition, zoning and tax data, the average home price in the surrounding neighborhood, and how quickly those homes are selling. Appraisals are usually ordered by a bank, prior to the approval of a loan to a prospective buyer. Sellers also occasionally use appraisal reports to determine their property's value before placing it on the market.

On the other hand, a home inspection is a visual exam of the amenities, systems, structure and components of your home, taking note of anything damaged, in need of repair, or unsafe. These observations on the property's physical integrity are noted by the inspector in a written report, with a detailed description of any problems and, if applicable, recommendations for repairs or further evaluation. Inspection reports let sellers know what repairs may improve their home's value on the market, or make it easier to close with a buyer. Buyers can use inspection reports the same way car buyers use vehicle reports - to determine if they're buying a lemon. The buyer can request the seller address these repairs prior to closing, or come to an alternate agreement before signing, as a detailed home inspection may give buyers more power at the negotiation table.

In short, appraisals estimate the market value of your home for loan approval or pricing purposes; home inspections highlight its structural condition. Appraisers don't physically peer into every nook and cranny, and inspectors don't pore over financial documents.

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About The Author

Lesley is licensed in real estate sales and brokerage specializing in Cambridge. She...

Phone: (617) 455-7528

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