The New York Appraisal Mgmt. Co.                                        

The Appraisal vs. the Home Inspection

Under the HUD "Homebuyer Protection Initiative" homebuyers with FHA mortgages must receive a new form written in plain english that summarizes all the defects found by the appraiser before they purchase a home.  The homebuyer can not receive the FHA mortgage until all the defects have been corrected.  The real estate community is troubled by this new requirement because of the inability of appraisers to detect the physical defects and possible problems within a home.

Real estate appraiser are trained in the valuation of real property and are not home inspectors.  Generally, real estate appraisers do not climb on the roof, remove the cover from electrical boxes or examine the furnace and appliances as would a home inspector.  Home inspectors are trained to be experts in all facets of construction and conduct an on-site inspection which may last up to four hours.  Appraisers perform a different service with a different level of expertise than a professional home inspector.  

Consumers should not be confused by the new HUD initiatives or the television commercials which portray an appraiser as a home inspector.  

Many home buyers mistakenly believe that a HUD appraisal and inspection is a guarantee that the property is free from defects.  In fact, the FHA appraisal only establishes the market value of the property for mortgage insurance purposes.  Buyers need to secure their own home inspection through the services of a qualified inspector.