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.
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.
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.