The appraisal process is conducted by a licence appraiser whose main focus is to determine value of the property. Appraisers use a variety of factors in their decision making. They weigh the location of the home, its proximity to desirable schools and other public facilities, the size of the lot, the size and condition of the home itself and recent sales prices of comparable properties, among other factors. Appraisers aren’t interested in whether or not the house is clean but they do notice signs of neglect such as cracked walls, chipped paint, broken windows, torn carpets, damaging flooring, and inoperable appliances.
If the borrower is applying for a VA or FHA loan, the house’s condition must also meet certain minimum requirements, but does not go into the detail that an inspector would.
An appraisal isn’t a substitute for a professional home inspection in fact they have some key differences. The appraiser formulates an opinion of the property’s value for the lender, while the inspector educates the buyer about the condition of the home and its major components. The appraiser is primarily focused on the value of the home whereas the inspector keys in on the home’s condition with an eye toward both existing and potential future problems. The inspector will spend several hours at the house, from inspecting the roof, attic, foundation, HVAC, water heater, electrical and plumbing.