Home Appraisal vs Home Inspection: What’s the Difference?

Home Appraisal vs Home Inspection: What’s the Difference?

When buying a home there are some industry terms not everyone is familiar with. Further confusion can happen since some of these terms appear to be very similar. Two of these are home appraisals and home inspections. Let’s take a look at a home appraisal vs home inspection and how they differ.

Home Appraisal vs Home Inspection what's the difference

What is a Home Appraisal?

First, let’s discuss what a home appraisal is when comparing a home appraisal vs home inspection. A home appraisal is a process that assesses the fair market value of a home. A trained and licensed appraiser, that knows the local area, should be able to give an accurate assessment of the property’s worth.

The appraiser, not only needs to provide an accurate value, but they need to be unbiased in their finding. To make sure this is the case, they have to provide supporting evidence, comparable sales. Appraisers are regulated and held to a higher standard. If they were to give an incorrect appraisal of a property they’ll be at risk of serious professional consequences.

The home appraiser will use a few methods to get to an accurate result. They’ll visit the property to learn about the condition it is in and what features it has. The plot of land the home sits on, as well as the local area. Even the views from the house will be taken into consideration.

They aren’t interested in the furniture in the home or anything else which isn’t a permanent part of the property. They will look at the number and size of the rooms, as well as the overall condition of the home.

This information is then used to compare the house to other properties. The appraiser will look at similar market data for other homes sold in the local area. This is similar to a comparative market analysis (CMA), which is prepared by real estate agents. It goes further than the CMA, however, and should provide a better prediction of the market value.

A home appraisal is normally required by a lender. They want to know they aren’t loaning more money than the house is worth. If they get this wrong and the homeowner defaults on the mortgage, they’ll never get all of their money back.

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What is a Home Inspection?

Now, let’s discuss what a home inspection is when comparing a home appraisal vs home inspection. A home inspection is the best way to determine what condition a property is in. What isn’t working properly, what needs to be replaced, and what may need to be replaced in the near future? The inspection should be carried out by a licensed inspector, who is trained and has passed the state board examination.

Home Appraisal vs Home Inspection what is a home inspectionIf the inspector finds problems with the property, and they normally do, this will be added to their report. This information can then be used by the buyer to determine how to proceed with the purchase, which will depend on the contract.

Some contracts will allow buyers to cancel the contract within the inspection period. While others will require the seller to make repairs. Negotiating a repair credit for repairs is often an option in both cases.

The home inspection is a visual check of the structure of the house as well as the heating, air conditioning, plumbing, and electrical systems. The foundations, doors, windows, and the roof will also be inspected among other checks.

Depending on the location of the property, the age, or other factors, additional inspections may be needed, these include:

  • Radon Tests
  • Wood Destroying Insect Checks (WDO)
  • Mold
  • Water Quality
  • Septic Tank Inspection
  • Swimming Pool and/or Spas

Some of these may be a standard part of the inspection depending on the location, others will come at an additional charge.

Getting a home inspection is important so buyers don’t end up buying a home they will later come to regret. It is an expense they can avoid, but this isn’t recommended. There are many things to inspect, which means there are several things that could need to be repaired or replaced.

What’s the Difference Between Appraisal and Inspection?

While both of these services, home appraisal vs home inspection, will involve visiting the home to inspect it, and both are normally paid for by the buyer, there are some important differences. The essential difference is the appraisal is trying to find the value of the home. While the home inspection is trying to find issues with the home. The inspection is a more thorough examination of the home to provide a clearer view of its condition.

Both services, home appraisal vs home inspection, will provide a report, and though the appraisal report will go to the lender, the buyer can normally ask for a copy. The home inspection report will provide a buyer with a lot more information about the home and give them the confidence to continue with the purchase or not.

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Popular Home Appraisal vs Home Inspection Questions

Who pays for inspection and appraisal? Typically the home buyer will pay for the home inspection and appraisal. However, if a home seller decides to get a pre-listing inspection or appraisal then they will pay for them.

Does home inspection affect appraisal? Yes, a home inspection can affect a home appraisal. However, the home appraiser typically doesn’t have access to the home inspection report. So unless the inspection report is given to the appraiser they won’t be aware of any defects found unless they can see them.

If the home inspection reveals minor problems, you may ask the seller to make the repairs.? Whether or not the seller will be required to repair minor problems ultimately depends on the contract. Some contracts will state the seller is required to fix up to “X” amount or repairs. While others will state the seller isn’t required to fix anything but the buyer also has the right to cancel the contract.

Can you be a home inspector and appraiser? Yes, a licensed home inspector can also be a licensed home appraiser. However, it could be difficult trying to balance both careers. As discussed above a home appraisal vs home inspection are two completely different things.

Additional Home Buying Resources

  • Home appraisals are a big part of the home buying and selling process, which is why it’s important to understand the appraisal process. Not only can a home appraisal impact a buyer’s financing and their ability to purchase a home it can impact the seller too. If the home didn’t appraise the entire transaction can fall apart leaving the buyer and seller at square one.
  • If you plan on investing in real estate you should always get a home inspection. For those who decide to skip it may find their “investment” become a financial burden.  When a home inspection is performed the inspector will be able to shed light on the condition of the home and any immediate or future repair/replacement expenses.
  • One of the top items on a home buying checklist will be a home inspection, However, there are many other things buyers need to do, like gather important documents for their lender and closing company. Buying a home has a lot of moving parts, but when a buyer is organized and works with a top Realtor it will be a lot easier.

About the Author

Top Wellington Realtor, Michelle Gibson, wrote: “Home Appraisal vs Home Inspection: What’s the Difference?”

Michelle has been specializing in residential real estate since 2001 throughout Wellington Florida and the surrounding area. Whether you’re looking to buy, sell or rent she will guide you through the entire real estate transaction. If you’re ready to put Michelle’s knowledge and expertise to work for you call or e-mail her today.

Areas of service include WellingtonLake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres, and more.

Home Appraisal vs Home Inspection: What’s the Difference?

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Michelle Gibson Wellington Florida REALTORMichelle Gibson of the Hansen Real Estate Group Inc is a full-time REALTOR who has been specializing in Wellington Florida real estate since 2001. This veteran of the real estate industry has expertise in technology, marketing, and social media.


Hansen Real Estate Group Inc. is a full-service real estate brokerage specializing in residential real estate. As a customer-focused, quality organization, we achieve success one client at a time. Call 561-333-0446 or e-mail me today at [email protected].

Michelle Gibson and Hansen Real Estate Group Inc fully support the principles of the Fair Housing Act and the Equal Opportunity Act. Accessibility Statement


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