Ever wonder about the difference between a property appraisal and an inspection, and how each is used during the home buying process?

An appraisal is a formal written assessment of the value of a home or property. A lender usually requires an appraisal to determine the market value of the property to make sure the amount borrowed does not exceed the value of the property being purchased. An appraiser is usually hired by the lender and their fee is one of the expenses included at settlement or closing.

An inspection is an onsite assessment of the systems and structural integrity of the property. An inspection is intended to find any hidden problems and as a condition of the sale. Prospective buyers hire an inspector directly and normally make payment at the time of the inspection.

Both appraisers and inspectors act as independent third parties while real estate agents represent either the buyer or the seller and thus have a stake in the outcome of a transaction. As an agent, I can still provide you with a free comparable market analysis or CMA which will give you a good idea of what your home is currently worth.

Research shows that for most of us, the equity in our homes is more than three times greater than the value of all our other investments combined. In spite of the cyclical volatility in the housing market, you can increase the long-term equity in your home through regular maintenance and well-planned improvements.

Postponing needed maintenance can substantially reduce your home’s market value when you decide to sell it. The three types of maintenance most commonly deferred are water damage, pests and roof repair or replacement.

Remodeling can add improvements that will make your home more functional and pleasurable to live in now as well as more valuable when you do put it on the market. Updating your kitchen and bathrooms are your best remodeling investment while converting a basement into a family room, adding a sport court or swimming pool provide the lowest return in terms of increased equity.

Prospective buyers are looking for a home that best fits their living needs with a minimum of work before they move in.  While you may not be ready to sell right now, making sure your home is properly maintained and tastefully updated can provide a handsome return on your investment when you do decide to sell.