Home Inspection vs Appraisal: How Are They Different?

It’s no secret that real estate can be one of the most lucrative industries to get involved in. Whether you’re buying or selling a home, chances are that you’ll need to incorporate a home inspection, home appraisal, or both at some point during the process.

But, not everybody understands the difference between the two. Fortunately, the answer isn’t as complicated as it may seem at first.

Not sure where to start? Don’t worry, we’ve got you covered.

Let’s take a look at everything you need to know about a home inspection vs appraisal.

Home Inspections

As the name implies, a home inspection involves hiring a professional inspector to evaluate the house. They take a handful of factors into consideration, such as the physical integrity of the home, the overall condition of its components, etc.

More specifically, and inspector typically investigates the plumbing, electrical wiring, roof, foundation, and HVAC systems in search of any issues that need to be conveyed to the parties involved.

Inspections are held so that the buyer can stay informed about any areas that need attention. For example, foregoing a home inspection puts the buyer at risk of purchasing a property that has outstanding issues. In some cases, these could be particularly worrisome, such as wiring problems.

Since most of the benefits of a home inspection apply to a buyer, they are typically the ones responsible for organizing a formal inspection.

After the inspector completes their job, they will write a report the details their findings.

This report can also be used as leverage during the transaction. For instance, a buyer may suggest that the seller should lower their asking price due to outstanding repairs the buyer will have to make if they purchase the home. They could also ask the seller to make any necessary repairs before the transaction concludes.

Home Appraisals

Appraisals are similar to inspections, but they focus more on the monetary value of the home as opposed to its overall structural integrity.

In the vast majority of scenarios, the professional conducting the home’s appraisal will be an unbiased third-party. If a lender is involved in a real estate transaction, they are usually the ones who organize the appraisal of the property.

Initially, an appraiser will evaluate the home on their own similar to how an inspector would. However, they use this information to establish the value of the property.

They use the findings from their appraisal along with the value of comparable homes in the area in order to formulate an accurate number.

During the final report that they create, the appraiser is responsible for conveying how they calculated the financial value of the home. They then send this report to each party involved— typically the lender, buyer, and seller.

This report will also include information on the current local real estate market, sales statistics related to similar homes, etc. so that each party has a full understanding of the factors that influenced the appraiser’s decision. Otherwise, it may not be entirely obvious how the appraiser was able to reach their conclusion.

Home Inspection vs Appraisal

As previously mentioned, the most obvious difference between the two is that an appraisal is conducted in order to establish value while a home inspection aims to evaluate the overall condition of a property.

An appraisal is also much more in-depth than an inspection since it involves researching market trends and other similar properties. After the inspector has completed their analysis, their role has concluded.

It’s important to note, though, that an inspector spends far more time within a home that an appraiser does.

In general, an appraiser more or less conducts a simple walk-through when visiting a property. An inspector typically spends several hours within the home while investigating the necessary attributes.

While there are a handful of similarities between the two, the most significant is the benefit that they provide to a buyer. An inspection will prevent a buyer from discovering issues on their own after they purchase the home, and an appraisal will ensure that they pay a fair amount.

Do You Need Both?

Occasionally, buyers will have no choice but to work with an appraiser if it’s mandated by their lender. If they’re paying for the home on their own, though, they don’t always have to go this route.

Although an appraisal will give you an accurate estimate of the home’s value, the price you choose to pay is still up to you. For instance, you may be willing to pay more than the market value for a home due to its geographical location.

An inspection, though, is something that you should never neglect. Without hiring a professional to conduct a thorough analysis, you’ll never be absolutely sure that the home you intend to purchase doesn’t have any outstanding issues.

So, it’s highly recommended to hire a qualified, professional inspector simply for peace of mind. Otherwise, you may find that you have to deal with costly repairs entirely on your own when they could have been handled before the transaction took place.

Understanding the Differences

With the above information about the nuances of a home inspection vs appraisal in mind, you’ll be well on your way toward making the decision that’s best for you. If you are purchasing a home in Central Florida or the Orlando area, call us today to set up a home inspection.

Want to learn more about how we can help? Feel free to get in touch with us today to see what we can do.

foundation inspection

6 Critical Signs You Need a Foundation Inspection Now

A 2023 survey revealed a nationwide housing shortage, with nearly 4 million missing homes, a 3% jump from the previous years. This shortage puts pressure on developers and buyers, making some to overlook crucial steps like a foundation inspection. Remember, while your...
pre-purchase home inspection

What to Expect During a Pre-Purchase Home Inspection

Homeownership dreams are alive for many Americans. In fact, nearly 1 in 8 (12% of Americans) intend to buy a home in 2024 -- with Florida being an attractive choice for many. If you're dreaming of owning a home in sunny Central Florida, doing a pre-purchase home...
phase 1 environmental assessment cost

How Much Does a Phase 1 Environment Assessment Cost in Ocala?

You've scouted out the perfect commercial property in Ocala, FL, and you're ready to make a move to buy it. But... hang on. There's a big step that needs to happen first: a Phase 1 Environmental Site Assessment. You might be asking yourself what it is. And "What does...
Rental property inspection checklist

Rental Property Inspection Checklist for Ocala, Florida Residents

Regular property inspections can save Ocala landlords thousands of dollars. Though there's an upfront cost, the savings from missed maintenance issues are significant. These can include problems with your HVAC, electrical, plumbing, roof, and more. Florida also ranks...
new construction

Crafting Your Construction Budget: A Complete Walkthrough

You're about to start a new construction project, but find yourself getting nervous about the cost. What can you do? The best move is to craft a construction budget! Today we're guiding you through the process of crafting an accurate budget that not only anticipates...
Well Water Quality Testing

How Well Water Quality Testing Can Impact Property Value and Home Sales

We all know curb appeal can impact whether a home sells, but did you know that water quality can have an impact, too? Don't neglect to factor in the water running from your taps when you're getting ready to sell a home. And that's especially true if you're relying on...
manufactured home tie-down certifications

Understanding the Importance of Manufactured Home Tie-Down Certifications

Did you know that manufactured home tie-down certifications play a crucial role in ensuring the safety and stability of your dwelling? As a home buyer or real estate agent, understanding the significance of these certifications is paramount. According to studies,...
Balcony railing inspections in Florida

The Benefits of Hiring a Professional for Balcony Railing Inspections in Florida

Imagine enjoying a beautiful Florida sunset from your balcony, only to have the railing give way beneath you. That's terrifying! Balcony railing inspections in Florida aren't just a formality. They're a crucial safeguard against accidents and potential liabilities....
nnn lease inspection

The Benefits of Regular NNN Lease Inspections for Commercial Properties

When investing in commercial real estate, the longevity and profitability of your investment hinge on several factors. Property management practices play a pivotal role. One often overlooked but crucial strategy is conducting an NNN lease inspection. This detailed...
radon services

Radon Services: The Importance of Radon Testing for Homeowners

Roughly 88% of homebuyers get a home inspection when they buy a house. Out of those inspections, almost the same amount show some kind of problem that needs to be fixed. In a best-case scenario, all a homeowner needs to do is patch up a hole in their roof or replace a...

Request Inspection

We perform thousands of inspections every year

Let our experience of residential and commercial property inspections in the Greater Orlando area work to your advantage!

Click Here To Schedule Online