When you’re buying or selling a home, it’s important to know the difference between a home valuation, a home appraisal and a home inspection. This guide explains the differences so you know what to expect whether you’re buying or selling a home in Midland.
Home Valuations, Home Appraisals and Home Inspections: What’s the Difference?
Home valuations, home appraisals and home inspections are all vital parts of any real estate transaction, but they’re all different from each other. The following sections explain what each is and why it plays an important role in the purchase or sale of a home.
What is a Home Valuation?
A home valuation is an opinion of a home’s worth based on recent sales of similar homes in the area. A home valuation is typically used by sellers to help them set their asking price, and by buyers to give them an idea of what they should be willing to pay for a home.
A home valuation is not as detailed or in-depth as a home appraisal, but it can still be a useful tool for both buyers and sellers.
Related: 5 common contingencies in real estate contracts
What is a Home Appraisal?
A home appraisal is a more detailed and in-depth opinion, created by a trained appraiser, of a home’s worth than a home valuation. A home appraisal is typically required by lenders in order to approve a loan for the purchase of a home.
The appraiser will take into account the same factors that are considered in a home valuation, but they will also inspect the home itself and make note of any repairs that may be needed. This makes a home appraisal more accurate than a home valuation, but it can also take longer to complete.
Related: How to get higher offers on your home
What is a Home Inspection?
A home inspection is a thorough examination of the condition of a home, conducted by a trained professional. Home inspections are typically used by buyers to assess the condition of the home they’re interested in purchasing.
The inspector will look at all aspects of the home, from the foundation to the roof, and make note of any repairs that may be needed. This can be a useful tool for buyers, but it’s important to remember that a home inspection is not the same as a home appraisal.
While all three of these services are important, they serve different purposes. A home valuation can help you set a price for your home or understand what you should be willing to pay for a home you’re interested in purchasing. A home appraisal is a more detailed opinion of a home’s worth that’s typically required by lenders. And a home inspection is a thorough examination of the condition of a home that can be used by buyers to assess the condition of the property they’re interested in purchasing.
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