What is the difference between an Appraisal and an Inspection?

Appraisals are required by the loan company to determine the home’s value.

Inspections are optional (but recommended) and determine the condition of the home.

You should get both of them done, as this makes sure the home is worth what you’re paying for it and that its’ safe for you and your family to live in. (As the buyer, you will pay for both services)

How is a home appraised?

An appraiser determines the value of your home, by looking at the home’s location, size, condition, and similar recently sold houses in the same area. They analyze this information and create a report of the home’s market value. The lender makes a decision based on this report on whether to approve the loan.

What does a home inspection cover?

A home inspection is done to see the condition of the home and uncover potential issues.  The inspector will look at the structural and mechanical components of the house (HVAC, structure, foundation, electrical , plumbing etc). When the inspection is complete, you’ll receive a report. This will help you determine any repairs that may be needed and help you negotiate with the seller to have them complete the repairs or reduce the cost of the home.  

Want to know even more? Here I describe the difference between a Home Inspection and a Foundation Inspection.

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