One common misconception that home buyers sometimes have is that the lender’s appraisal is also a home inspection. It is understandable to mix up the two, so let’s break down the difference.
Since the home inspection happens first, let’s cover that process first. The buyer has a home inspection contingency to have the home checked out from top to bottom, from roof to foundation, and everything in between. The home inspector will make an evaluation of the mechanical and structural elements of the home so that you can rest assured that the home you are buying is healthy and safe. A home inspection typically takes 90-120 minutes, depending on the size and complexity of the home.
No home is perfect, and the home inspector is sure to find some issues—some larger and some minor. Those issues can usually be used to negotiate with the seller to have repairs completed or to receive monetary remedies in lieu of repairs. The best home inspectors are licensed and belong to professional organizations with high professional standards of membership.
The home inspector is also a generalist, and may recommend specialists to look at certain issues, such as roof, foundation or chimney. It is also fairly typical to have specialists inspect the sewer line with a camera scope and test the radon levels in the home.
The appraiser is a completely different professional, and he or she typically visits the home after inspections have been completed. Trained to evaluate data and make educated analyses, the appraiser is sent out by your lender and will spend approximately 15-20 minutes at the home to take measurements and make a visual evaluation of the general features and conditions. The appraiser then compares data about the home to other comparable, nearby homes that have recently sold to see of the purchase price makes sense for the lender in the current market.
On some occasions, the appraiser may call out for some repairs or remedies for health and safety issues. Common requirements include: current smoke and carbon monoxide detectors and straps on the water heater. In rarer circumstances, the appraiser may cite peeling paint or dry rot issues. When the appraiser calls for repairs, it is typical for the seller to make these repairs, but it does have to be negotiated. Bear in mind, that the appraiser is not doing a home inspection. He or she is not getting on the roof, and may only take a quick look in the attic and crawlspace.
As your Realtor, I try to look for things that the appraiser may call out in the appraisal report so that we can have those issues dealt with before that visit. If the appraiser does require repairs, that will lead to a second visit (which you will pay for) and delay the process, so we want to streamline that as much as possible.