When buying or selling a home a bunch of nosy people may creep around trying to gather all kinds of information. We are talking about inspections and appraisals. Who are all these guys, and what is the difference between a home inspector, building inspector, property appraiser or county property appraiser? And what is an appraisal vs. CMA?
Let us start with the Building Inspector first. He is a licensed official, employed by the building department of the city or county. His foremost job is to enforce the application of the building codes. When building a new home he will come out frequently to the job site to check the various stages of the building process. Whenever something is not up to the code, he loses his temper and doesn’t sign off the necessary paperwork. This is the unmistakable sign for the contractor to work harder and bring his job up to code. He needs the signature desperately before he can continue his job, or before he can present you another bill.
The county building inspector also checks alterations of existing homes. For example: after the installation of hurricane shutters, he will come out and inspect the job. Same procedure like mentioned before: If the work was done in accordance to the drawings and specifications he will sign off the documents with a smiley face, if it was not done correctly he is usually grumpy and the homeowner or contractor has to fix the problems. A re-inspection comes with a separate bill. When buying a home this guy stays away: he is usually never involved, unless there are major concerns and one of the parties actively calls the building department for clarification.
The Property Appraiser is, for whatever reason, often confused with the Home Inspector, although they are performing two completely different jobs. The Property Appraiser or Real Estate appraiser determines only the value of the property. He tries to figure out for what it would likely sell under current market conditions. It is sometimes not an easy task, especially when there are no sold comparables in the area. However, he is always trying to do his best; therefore, he takes many factors into account, including the design, age, overall condition, lot, and location. A visible and severe roof problem may spoil the value of the home, but in general: an appraiser is not interested in plumbing or electrical problems; he is only looking for the overall picture in order to determine a value.
In Florida, real estate appraisers are regulated by the Florida Real Estate Appraisal Board (Part of the Florida Department of Business and Professional Regulation). They need a license and they have to attend continuing education classes in order to keep their license valid. When applying for a mortgage the bank will always send out an appraiser to determine the actual value of the building. They want to know the value before throwing the money down the drain. It is only up to the cash buyer if he wants to skip the appraisal and burn his own money. If in doubt it is worth spending $400 for an appraisal instead of paying too much..
“Oh my gosh! A $400 bill! My realtor does this for free. He told me that my house is worth $xxx and I paid nothing for it.” Nope, this is not an appraisal, you are talking about two different things. The only task a Realtor in Florida is allowed to do (by law) is called CMA (Comparative Marketing Analysis). He can look for sold homes in your area and compare their features with your home’s features. By adding and subtracting certain amounts for items you home has/does not have he will come as close to a sales price as possible. However, a CMA is only a price suggestion or estimate - not an appraisal.
For the sake of completeness, it should be mentioned that there is another guy with a similar name. It is the county/city property appraiser, and he is hiding somewhere in a dark cellar of a government building (I am kidding). He is appraising all homes on a yearly basis in order to squeeze as many dollars out of the people’s pockets as possible. The figures he is coming up with are used for “property tax assessments”. Unfortunately, nobody likes a high value when it comes to taxation, but everybody likes a high value when it comes to selling, this poor guy is constantly in boiling water. You will never be able to talk to him or see him for that reason. Don’t try to call him, neither will he give you a price suggestion if you want to sell nor will he accept your sales price in case you sold. If you gave your home away to your kids, charging them only $50, he would not be impressed. Your kid’s property tax is not going to be a percentage of the $50. It will be according to his appraisal.
Now it is time to bring another “Sherlock Holmes” into play. A person you should hire when buying a home is the Residential Home Inspector. Although he is crawling into every cranny, he is only performing a non-invasive examination of the condition of a home. A home inspector will check the roof and attic, all systems and components (water heater, furnaces, air conditioning, duct work, fireplace and sprinklers). He will also check the structural elements (walls, ceilings, floors, foundation), plumbing (toilets, showers, sinks, faucets and traps), electrical (main panel, circuit breakers, wiring, grounding, receptacles, ceiling fans and light fixtures), appliances, and many other aspects of the building. He will not drill holes nor will he take systems apart in order to inspect them. Therefore, he may not detect problems hidden in walls or concrete, but he will cover at least 98% of all possible problems.
When the job is done the home inspector prepares and delivers a written report of findings. The inspection report does not describe the condition of every component of the house if it is in good shape, but should note every item that is defective or needs attention. Serious problems in his eyes are: foundation deficiencies, moisture/ drainage/ plumbing issues, furnace/A/C/electrical problems, roofs with short life expectancy or leaks, and health or safety issues.
There are certain aspects not covered by a home inspection. The following is only sometimes part of the inspection (depending on the qualification of the inspector): Termite/rodent infestation, mold/mildew/fungi, lead, asbestos, septic, water quality, and radon/methane/radiation/formaldehyde. If you want those inspections done you have to call a specialist. The pest inspection is usually free, but if they find any “pets” they will offer you a treatment (not for free) and in addition an annual service contract (also not for free).
A general list of exclusions (list is not complete): permit research, easements/right of way, code or zoning violations, surveys, boundaries, easements, condition of title, environmental hazards, or buried piping/sewer lines to name a few. The home inspector does not mess around with legal issues..
To make a long story short: A professional home inspection is an examination of the current condition of the home, not an inspection to verify compliance with appropriate codes. Code enforcement is strictly the building inspector’s job, and the home inspector does not dare to take his job away.
Since July 1, 2010, Home Inspectors do need a licence from the Department of Business and Professional Regulation. Before 2010 no license was required in Florida. There is a grandfathering clause in the law for those home inspectors who did inspections before the law became effective. They still have to meet the licensure requirements though. If you need a reliable home inspector in Sarasota/Sarasota County but are in doubt what to do, shoot me an email, and I will send you a list of inspectors who have done flawless inspections in the past.