Appraisers and home inspectors are important parts of a real estate transaction, but they serve completely different purposes. There are significant differences between an appraisal and a home inspection, it’s best for every home buyer to become familiar with the purpose of each. In fact, some real estate agents would also benefit from a reminder about their respective roles.

What is a Real Estate Appraisal?

In brief (operative word), an appraisal is an estimate of the current market value of a home completed by an appraiser using set evaluation criteria. In most cases, if a home buyer is getting a mortgage, an appraisal will be completed. The appraiser represents the interests of the home buyer's lender. They do not represent either buyer or seller. They are hired to ensure that the lender has adequate equity to cover the amount borrowed should the lender be required to take the home back. In simple terms, the lender will not lend more than a certain percentage of what the home is worth as of the date of contract.

There are situations where a lender may waive the appraisal or complete a different evaluation of the home. These tend to be seen with high quality buyers and low loan to value transactions. If a buyer with a credit score of 750 is buying a 300K home and putting down 200K, the lender may waive the appraisal or complete a simpler version like a desktop, hybrid, or drive by. Every situation is different.

A standard appraisal includes an interior and exterior inspection of the home, photos of all rooms and areas of interest, measurements, a sketch and at least 3-5 comparable sales and 2-3 comparable listings. Time on site varies with the home but most appraisers spend 30-60 minutes at the subject property.

Cash purchasers do not require an appraisal but some buyers retain that option to allow a disinterested third party to evaluate the property. On occasion, appraisals come in below contract price. If the appraisal comes in below contract price, there are actions taken between buyer and seller that can work to resolve the issue. Every state and situation are different, this is just one reason it pays to work with experienced agents.

What is a Home Inspection?

Unlike appraisals, home inspections are not a requirement for any transaction. They are, however, highly recommended, and often money well spent. During the ‘21-’22 markets, buyers routinely waived their right to inspect, buying homes “as is” to be most appealing to sellers. In many cases, these buyers ended up missing issues in the home that later cost them. In fact, home buyer remorse during this period hit record highs, due mainly to buy homes that needed major work.

Home inspectors are hired and paid by the buyer; they represent their interests in the transactions. Inspections last 2-5 hours depending on the home and scope of work, written reports are typically delivered the next day. It is strongly suggested that buyers attend the inspection to walk the home with the inspector. All parts of the home are inspected; inside and out, roof to basement. Most reports are form filled, categorized, and filled with photos and suggestions.

Every home has issues and inspectors will enumerate them. At times, the inspection reports can be overwhelming, especially to new home buyers. Reports will general a request from the buyer to seller to address issues, again it is key to work with experienced agents that can keep things in context. Both sides can be hype emotional; buyers want a “perfect” home and sellers take offense when their “perfect” home isn’t reflected as they see it. A quality inspector explains things to the buyer on site then follows up with cogent points in the report. Those that separate the routine from the serious issues are a huge asset to the buyer.

What it Takes

It is a long road to become an appraiser – far longer and significantly more difficult than getting a real estate license. Appraisers, unlike agents, are required to complete a lengthy apprenticeship as well as classes and exams. It’s often two or more years before a trainee moves up to licensed and can begin to solicit work independently. Continuing education, ethics, USPAP, liability insurance, and other requirements are in place. The most experienced appraisers are certified and they can complete any level of residential work. The appraisal industry is highly regulated by both national and state oversight.

At this time in Georgia, there is no requirement for home inspectors to be licensed and there is no regulation or oversight from the state. There are, however, several national trade organizations that maintain a level of consistency for members across the country. Many inspectors have past real-world experience in a construction trade and that can be a huge plus. Home inspectors typically carry liability insurance and are members of one or several of the nationally recognized trade organizations.

The Hank Miller Team puts 30+ years of full time sales & appraisal experience to work for you. Act with complete confidence & make sound, decisive real estate decisions. 678-428-8276 and

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