Appraisal vs Home Inspection

Both an appraisal and a home inspection are important steps of the home-buying process, so it’s well worth your effort to distinguish the differences between them and how they can uncover detailed information about the home’s value and condition.

Appraisal
Essentially, home appraisal is a survey activity performed by a professional in order to develop an expert opinion on the market value of a real estate property. Home appraisal is usually done for a lending company or a bank as a prerequisite for the approval of a mortgage application by a home buyer.

The essential elements of a home appraisal report include information and data related to the overall condition of the property, the neighbourhood, variables that contribute to the sale of similar homes and the time spent in selling similar properties. The appraisal report may be presented as a comparable sales analysis or a cost assessment of value.

Home Inspection
A home inspection is not used to determine property value, but will provide an assessment of the physical condition of a property. A well-trained home inspector will perform a comprehensive visual inspection to determine the condition of the building and all of its major systems (roof, structural, heating, plumbing and electrical systems, etc).

While an appraisal is intended to provide the lender with sufficient information to decide on mortgage financing, a home inspection will hopefully reveal to a potential home buyer whether the building and its systems are in sound working order.

If there are outstanding issues, a good inspector will provide the potential purchaser with a schedule outlining the estimated costs and a time line detailing when these repairs will need to be completed.

Do You Need a Home Inspection or an Engineering Analysis?

By James Dobney, James Dobney Inspections

What do homebuyers want to know?
If you’re like most homebuyers, you want to know the condition of a house before you buy it. Are the home’s mechanical systems and structural components in working order? Will they need repair or replacement?

Answering these questions is precisely the job of a professional Home Inspector during a complete visual examination of the property. A qualified Home Inspector, through specific training and experience, understands not only how a home’s systems and components should work, but also how they interact with each other, and how they stand the test of time.

Why the Confusion?
It is not uncommon for homebuyers to be confused about who is qualified to perform home inspections. There are, for example, no home inspection degrees offered or required by law. In some cases, consumers have been led to believe that a home inspection involves an engineering analysis and therefore requires the use of a licensed Professional Engineer (P.Eng.). The confusion is compounded by the inadvertent misuse of the terms “engineer” and “engineering inspection.”

Visual home inspections do not involve engineering analysis, however, even when performed by P.Eng.s. In fact, engineering is an entirely different type of investigation, which entails detailed scientific measurements, tests, calculations, and/or analysis. Normally this is done on one specific component of the house (structural or electrical, for example) by, or under the direction of, and engineer trained in that area. Such a technically exhaustive analysis involves considerable time and expense, and is only appropriate on rare occasions when visual evidence exists to indicate design problems which require further, specialized investigation.

Finding a Qualified Home Inspector Who is Right for You
The most reliable and respected indication of Home Inspector qualifications is membership in the Canadian Association of Home & Property Inspectors of BC — CAHPI (BC), a self-regulating association of professional home and property inspectors, representing all regions of British Columbia. They are committed to protecting consumers through their stringent membership requirements, mandatory ongoing training programs, and their detailed Standards of Practice and Code of Ethics. CAHPI (BC) is presently seeking regulatory control of the home inspection industry through the Province of British Columbia, so that consumers can be better assured of inspector qualifications.

A competent and professional home inspector must be a fully trained generalist able to understand how the systems/components found in a home perform and mature over time. These systems include items such as: structural components, exterior components, roofing, plumbing, electrical, heating, air conditioning, interior, insulation and ventilation. The home inspector must be able to effectively report his findings to the customer, and the inspection report must conform to the CAHPI (BC) Standards of Practice.

Clear communication is an important part of the home inspection business. In addition to providing a quality report, the inspector must be able to respond well to enquiries. Good communication and interpersonal skills are definite assets.

Therefore, of you are looking for a qualified expert to perform a visual home inspection to determine the condition of your prospective new home, regardless of any degrees or titles, be sure to use a CAHPI (BC) member.

If you still have further questions about your prospective home and the type of professional you need to inspect it, please contact James Dobney & Associates or CAHPI (BC) — www.cahpi.bc.ca