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  • Writer's pictureCourtney Roberts

The difference between an appraisal and a home inspection

Simply put, a home appraisal determines the value of the home and a home inspection determines the condition of a home. Here's a breakdown of each and why they're important in the home buying process.


Once you are under contract to purchase a home, your mortgage lender will order an appraisal to confirm the value of the home you're buying. An appraisal is an estimation of the home's current market value, which is determined by a licensed real estate appraiser. Your lender wants to ensure that the money they're lending is a fair amount for the home and that you are not overpaying for the property. The value of the home is calculated by examining the current local housing market and the comparable properties that have recently sold. The real estate appraiser also evaluates the overall condition of the home and its features, as well as the square footage and number of bedrooms and bathrooms. The appraiser will also note if there are any repairs that need to be made or maintenance that needs to be done. Appraisals are especially important in a seller's market where low inventory can result in bidding wars which push home prices even higher. Your lender will only allow you to borrow based on the value of the home, which helps keep home prices in check. If the appraisal comes in lower than the price you've agreed to pay for the home, your Realtor will help you navigate any additional negotiations in the buying process.

Home Inspection A home inspection determines the condition of the home before you finalize the sale. Home inspections are used to provide an opportunity for a buyer to identify any major issues with a home prior to closing. The inspector will complete a full inspection of the outside of the structure. This will include any crawlspaces under the home all the way up to the roof. The inspector will also complete a thorough inspection of the interior of the home, including everything from the ceiling to the cabinets under the kitchen and bathroom sinks. Most importantly, the home inspector will look the major systems including HVAC, electrical, and plumbing.

A typical home inspection lasts two to three hours. Your realtor will be present and it's a great idea for you to be present as well to get a firsthand explanation of the inspector's findings. You can also ask questions. Any problems the inspector finds will make more sense if you see them in person instead of relying solely on the photos in the inspection report.

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