A home is one of the most important purchases you will ever make. It is going to be one of your biggest expenses ever. If you buy the right home, you could set yourself up for a future of financial fulfillment. But if you make a mistake, Doug Anderson Management warns, the home will burn a hole in your pocket and derail your financial plans. Buying a home is not a thing to be done in a hurry. You must take the necessary steps to confirm every detail of a home before you close the deal.

And this is what a home appraisal and home inspection will help you do. But is a home appraisal not the same as a home inspection? Most people confuse the two, viewing them as two ways of saying the same thing. This is not correct. Although home appraisals and home inspections both happen before the sale of a home, they are not the same. The two of them exist to help buyers get the most value when they buy a home. They are complementary but not the same.

What is an appraisal?

An appraisal checks the house to verify its condition and determine a fair sales price for it. The home appraiser will inspect a home in terms of its square footage, the number of bedrooms and bathrooms, and the size of the lot it sits on. It looks at the home’s major systems and structures to compare their current state against property records. The home appraiser also checks the home for visible signs of damage. Finally, to complete its assessment of the home, the appraisal checks the prices of similar homes that have been sold and are being sold in the area.

After the evaluation, the appraiser presents a report of the findings to the three parties involved – the buyer, seller, and lender. This report contains the final value the appraiser has calculated for the home, as well as, how that value was calculated.

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It includes details of comparable sales, data on the current state of the property market in the area, and all information used to calculate the home’s value. The appraiser weighs the good and bad things about a home to arrive at a fair price for the property.

What is a home inspection?

The home inspection is a detailed visual examination of a home to determine its true condition. It seeks to uncover underlying issues that a buyer or seller needs to be aware of.

The inspector conducts an objective, visual examination of the physical structure and systems of a home, from inspection of the roof to the foundation. The standard home inspector’s report will include an evaluation of

the condition of the home’s heating system, central air conditioning system, interior plumbing and electrical systems, the roof, attic, and visible structure.

The home inspector prepares a home inspection report and submits it to the ordering party (buyer, seller, agent). It will list each identified problem and rate it according to its level of seriousness. It shows the ordering party which items are minor and which are major repairs. If problems are found, the inspector will refer you to the appropriate specialist or trades persontradesperson for further evaluation The report is intended to help the ordering party understand the current condition of the home. The ordering party can use the home inspection report as the basis for terminating the sales agreement or to renegotiate the sales price of the home.

Major differences between a home appraisal and a home inspection:


The appraisal seeks to determine the market value of a home. The inspection focuses on the condition of the home to help assess the risk of buying a home.

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The home inspection is limited to the home; it is not concerned with anything beyond its boundaries. The home appraisal bases its conclusion on what exists in the surrounding neighborhood.


The home appraisal is ordered by the lender on behalf of the buyer/owner and is mandatory. But home inspections are voluntary and usually arranged by buyers for their benefit.


The outcome of an appraisal may affect a person’s ability to get the loan amount they need. Depending on lender demands, the inspection has no such effect.


Appraisers work alone, unaccompanied by the buyer, and the report of their findings is only revealed via the report. Home inspectors, welcome buyers and sellers to accompany them and will discuss their findings as they proceed.

In closing, home appraisals and home inspections are similar in one important respect; they both protect buyers’ and sellers’ interests. Yet they are not interchangeable. You cannot use the inspection report to determine a home’s value. And you should not use the appraisal to try and determine its condition.

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