Do You Know the Difference Between an Inspection and an Appraisal

The Millam Real Estate Group from Keller Williams Realty Integrity NW answer another frequent question asked...

What is the difference between having an inspection and having an appraisal?

Both of these services are needed in most real estate transactions today, but the ladies of the Millam Real Estate Group clear up who is responsible for each service, when each is needed or required, and how they're used in a home buying transaction.

Her are the main bullet points you need to know about each one.

Home Inspections*

1. An inspection is for the protection of the new home owner
2. An inspection is a thoughtful review of a property's foundation, structural, mechanical, and electrical components
3. An inspection is typically paid for by the prospective home buyer
4. Home inspection pricing is based on the square footage and sometimes the age of a property
5. Additional, specialized inspections are sometimes recommended after a basic home inspection has been completed. Examples of additional inspections include, but are not limited to, mold inspections, radon inspections, sewer inspections, electrical inspections, pool or spa inspections, chimney inspections, or soil inspections

Lender Appraisals*

1. Appraisals are required by lenders on most mortgage lending applications
   
2. Appraisals are ordered by the lender as review of the property to ensure the home is valued at or more than the requested mortgage amount
3. Appraisals are a way for lenders to insure the value of a property under a variety of mortgage options
4. Although they are required by the lender and they benefit the lender, the buyer is required to pay for the cost of order in most cases.
5. The cost of an appraisal can vary, but averages between $400 and $550 for most midranged resale real estate and may be required to be paid up front or sometimes rolled into the closing costs
   

Every situation is different. This is why it's important you work closely with your REALTOR® and a trusted lending professional who has experience in these processes.

*Every market is different. Every home is different. Contact Lori Millam for more about current market statistics and to set up your Homebuyer's Strategy Session.

For more great tips and information make sure you follow our blog or find us on Facebook, Instagram, LinkedIn, Twitter and more.

763.241.7607