Difference Between Appraisals And Home
Inspections
Appraisals And Home Inspections Differ In
Several Aspects:
What Is A Home Appraisal?
According to the Appraisal Institute, the role
of the home appraiser is to "provide a
professional opinion, usually an estimate of
market value, to be used in making real estate
decisions." Typically, appraisers are employed
by lenders to estimate the value of real estate
involved in a loan transaction. An appraiser
hired by a lender works in the best interest of
their client, the lender.
What Is A Home Inspection?
A home inspection is an objective visual
examination of the physical structure and
systems of a house. Home inspectors are usually
employed by the prospective homebuyer. A home
inspector hired by a buyer works in the best
interest of their client, the homebuyer. An
appraisal is not a home inspection and a home
inspection is not an appraisal. Keep in mind
that the approval / acceptance of a home by a
lender is not an endorsement of the home's
physical condition.
Real Estate Industry And U.S. Department Of
Housing And Urban Development (HUD) Stress Need
For Home Inspections:
A major effort to increase public awareness of
the need for homebuyers to get a professional
home inspection before purchasing any property,
has been launched by the real estate industry
and HUD.The comprehensive consumer and
industry-wide education effort is spelled out in
a Memorandum of Understanding among HUD, the
Mortgage Bankers Association of America (MBA)
and the National Association of Realtors (NAR)
to support the Homebuyers Protection Initiative
announced June 10, 1999 by HUD Secretary, Andrew
Cuomo.
HUD Emphasizes Value Of Home Inspections
HUD said its initiative will improve home
appraisals for more than 1 million families who
purchase homes each year with mortgages insured
by the Federal Housing Administration (FHA) and
is designed to protect consumers from buying
homes with major undetected defects. It
specifies that homebuyers will sign and date a
"Consumer Notice" a new informational form,
before they purchase a home with an FHA
mortgage. The form advises them to get a home
inspection in addition to an appraisal.
