Manny S. Rizzuto

Mortgage Consultant NMLS#: 145229

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Cell: 908-334-7182

Home buyers in New Jersey tend to have a lot of questions relating to home inspections and appraisals. While these two procedures share some similarities, they have different purposes and objectives.

Home inspections are generally not required in New Jersey, but highly recommended. Appraisals, on the other hand, are required when a buyer is using a mortgage loan to finance the purchase.

Home Appraisal vs. Home Inspection

Let’s start by distinguishing the two kinds of property assessments. While they are often confused as being the same, home appraisals and inspections are actually different procedures with different objectives.

  • A home inspection is a thorough but non-invasive evaluation of the property’s overall condition. The American Society of Home Inspectors (ASHI) defines it as “an objective visual examination of the physical structure and systems of a house, from the roof to the foundation.” The primary objective here is to assess the condition of the property.
  • A home appraisal is a review of the property to determine its fair market value, based on current real estate market conditions. The appraiser will prepare a comprehensive report that includes sales data supporting his or her determination of value. Here, the primary objective is to determine the value of the property.

So there are some similarities between home inspections and appraisals in New Jersey. With both of these procedures, a trained and certified professional will review the home inside and out. The inspector is primarily concerned with the condition of the property (including the roof, foundation, installed systems, etc.). The appraiser is primarily concerned with the market value of the home.

Are They Required in New Jersey?

In New Jersey, as in most states, there are different requirements for home inspections and appraisals. And it partly depends on whether or not the buyer is using a mortgage loan to finance the purchase.

Home inspections are generally not required in New Jersey, but highly recommended. There is no law or other legal requirement that says home buyers must have a property inspection when buying a house. It’s an option.

Still, a professional and thorough inspection is a worthwhile investment. Especially when you consider that they generally only cost a few hundred dollars. By having the house professionally inspected, you will gain valuable insight into its current condition.

Home appraisals, on the other hand, are required for buyers who are using a mortgage loan.  That’s because banks and lenders want to make sure the house is worth the amount the buyer has agreed to pay for it. After all, the home is being used as collateral for the loan. Determining market value is beneficial for the borrower and the lender alike.

To assess the value of the home, the appraiser will review recent sales within the local real estate market, and then compare those sale prices to the home that’s being evaluated.

Valuable Insight for Buyers

Both home inspections and appraisals can provide valuable insight for you, as the home buyer. The inspection in particular can be an educational and eye-opening process.

An inspector can explain the different systems within the home and how they work. He or she can also show you the location of important features, such as cutoff valves.

Buying a house is a big investment, so you want to know everything you can about the property before purchasing. That’s the primary reason for having it inspected. So while a home inspection might not be required in New Jersey, it’s generally a wise investment.