Home Inspection vs. Appraisal: What's the Difference?

Homebuyers seeking a mortgage will encounter numerous professionals throughout the sale process, including the home inspector and appraiser. Although each of their services serves different purposes, the home inspection and appraisal provide valuable insight for the buyer and lending company.

Let’s take a deeper look at home inspections vs. appraisals to understand each service and why they both matter.

What Does a Home Inspector Do?

The lender does not usually require a home inspection for the homebuying process (VA and FHA loans often require inspections). Still, opting for a home inspection is strongly encouraged if you are seriously considering buying a home. Most order an inspection in the due diligence phase of the homebuying process, which begins after the seller accepts the offer.

The inspection helps you understand the quality of your potential home and reveals any minor or major issues. When searching for a home inspector to perform your inspection, ask friends and family for recommendations, study reviews, and talk to your agent about his or her preferred choice.

A credible inspector will analyze the various areas and systems of the house, including:

Attic
Basement
Electrical
Exterior
Foundation
HVAC
Plumbing
Roof

The home inspector’s purpose is to discover the actual condition of the house and reveal significant problems that would likely go undetected otherwise.

The buyer pays for the home inspection through closing costs unless otherwise negotiated with the seller.

What Does a Home Appraiser Do?

An appraisal is a general assessment of the home you are looking at and determines the property’s fair market value as a whole. It works to compare your prospective home’s value to the value of nearby homes, giving the lending company an idea of what the property is really worth. The lending company requires an appraisal before it approves any financing because it prevents the lender from lending more than the home is worth.

The appraiser will visit the house to observe its general condition, but the analysis is not as extensive as a home inspection. The appraiser will compare the home’s location, features, and finishes to other properties nearby and will review comparable sales in the area to gain a fair idea of the property’s value.

The lending company will typically contact the appraiser and arrange the appraisal. Still, the buyer is responsible for paying for the service through closing costs unless otherwise negotiated with the seller.

If you recently searched “home inspection vs. appraisal,” you’re likely an interested homebuyer who needs the team at Walker, Hulbert, Gray, & Moore on your side.

Our attorneys understand home inspections and appraisals and can offer expert legal advice regarding your prospective home once the reports are submitted. Let us help you analyze your home inspection and appraisal reports to get you the most from the homebuying process. Arrange a consultation with us today: 478-987-1415