WHAT'S THE DIFFERENCE?

🏠 HOME INSPECTION = WHAT'S WRONG WITH THE HOUSE?

Looks at the home's condition
- Helps identify repairs, maintenance items, and safety concerns
- Ordered by the buyer
- Usually not required by the lender

💰 APPRAISAL INSPECTION = WHAT'S THE HOUSE WORTH?

Determines the home's market value
- Required by most lenders
- Ordered by the lender
- Helps confirm the property is worth the purchase price

🌟 THINK OF IT THIS WAY 🌟
- Home Inspection: "What condition is the house in?"
- Appraisal Inspection: "What is the house worth?"

🔎 HOME INSPECTION...A home inspector evaluates the home's major systems and overall condition, including:
✔️ Roof and structure
✔️ Foundation
✔️ Plumbing
✔️ Electrical systems
✔️ Heating and cooling systems
✔️ Water leaks
✔️ Mold concerns
✔️ Pest issues

WHY HOME INSPECTION MATTERS: The inspection helps buyers understand...
- Current problems
- Future maintenance needs
- Potential repair costs

AFTER THE INSPECTION: The buyer may choose to...
- Move forward as-is
- Request repairs
- Request a credit toward closing costs
- Ask for a price reduction
- Cancel the purchase if allowed by the contract

🪙 APPRAISAL INSPECTION...The appraisal focuses on determining the home's market value. The appraiser considers:
✔️ Recent comparable sales ("comps")
✔️ Neighborhood and location
✔️ Home size and layout
✔️ Condition and upgrades
✔️ Current market trends

WHY APPRAISAL INSPECTION MATTERS: The lender wants to make sure the home is worth enough to support the loan amount.

If the Appraisal Comes In Low, the buyer and seller may...
- Renegotiate the price
- Have the buyer bring additional cash to closing
- Cancel the transaction if an appraisal contingency exists

*Important: Lenders generally base financing on the lower of the purchase price or appraised value*

⏱️ TYPICAL TIMELINE OF A TRANSACTION ⌛
1. Offer Accepted...The buyer and seller agree on price and terms.

2. Home Inspection...The buyer hires a licensed home inspector.

3. Review Inspection Report...The buyer reviews findings and decides whether to:
- Proceed as-is
- Request repairs
- Request credits
- Renegotiate

4. Buyer and Seller Reach Agreement

5. Appraisal Ordered by the Lender...The lender hires a licensed appraiser.

6. Appraisal Completed...The lender reviews the value and final loan approval moves forward.

7. Closing Day...The transaction closes and the buyer receives the keys.

🤔 GOOD TO KNOW...FOR YOUR INFORMATION 💁🏼‍♂️

An appraiser is not a home inspector! While appraisers are primarily evaluating value, they may note significant property issues they observe during their visit. For example, if an appraiser notices:

- A major water leak
- Missing flooring
- Broken windows
- Safety concerns

then the lender may require additional information or repairs before closing. In some cases, the appraiser may return to verify required repairs were completed before the loan can fund.

⭐ SIMPLE RULE TO REMEMBER ⭐

Home Inspection = Condition

Appraisal = Value

Both are important, but they serve very different purposes during the home-buying process 🙋‍♂️

"Let's REAL ESTATE!"