Home Inspection vs Appraisal: What’s The Difference?
Many confuse home inspection with appraisal as both involve a professional home examination.
The difference between a home inspection and an appraisal is that a home inspection tells you about the home's condition, while an appraisal tells you the home's value.
As both appraisal and home inspection can affect your decision to buy a home, knowing about them is essential.
Let’s explore home inspection vs appraisal in detail.
What Is An Appraisal?
A home appraisal is a process that estimates a home’s value. A professional and licensed appraiser conducts the appraisal. Appraisals are conducted anytime someone needs to know the worth of their home.
Homebuyers need an appraisal to ensure the lender’s amount is sufficient according to the home’s value. It also protects both the buyer and the seller's finances. For example, the appraisal may show the house is worth less than the amount asked; in such case, the lender may not approve the total loan amount, and the homebuyer has to figure another way out.
On the other hand, Sellers can use appraisal to ensure that the listing price is correct. This is also called pre-listing assessment.
Who Pays For The Appraisal And How Much It Costs?
Usually, a buyer pays the appraisal amount, but mortgage lenders mostly hire a professional appraiser to determine the value of the mortgage.
The appraisal service charges vary depending on location, mortgage type, and size of the mortgage. However, you’ll typically be charged $300 to $500 for an appraisal.
Home Appraisal Checklist
A typical home appraisal includes:
An evaluation of the interior and exterior condition of a home.
An evaluation of similar nearby homes’ evaluation.
An evaluation of the location of the home.
An evaluation of the size of the home.
An appraiser carefully evaluates the above things and provides the value to the homebuyer or seller.
Now, let’s explore what a home inspection is.
What Is a Home Inspection?
A home inspection is a professional quality assessment of a property that will be sold. It is done by a certified home inspector who inspects the home and provides a detailed report based on the evaluation. Home inspection ensures that you will make a financially sound decision.
Are Home Inspections For Buyers Or Sellers?
Home inspections are not legally required before buying a home, yet they’re highly recommended because they give you clarity and peace of mind. They protect you from any potential problems that you may face afterward.
For the sellers, it is better to get a home inspection before listing the home to sell because it protects you legally as you’ll disclose the things/problems before making the deal final. Moreover, you can also use the inspection report to ensure you’re selling your home at a fair market price.
How Much Does A Home Inspection Cost?
Home inspections can cost anywhere between $300 to $500 or more, based on the type of inspection you’re interested in.
You must pay the inspector this cost at the time of inspection.
Home Inspection Checklist
The home inspector typically inspects the following areas and tells which areas need repairs:
Roof
Exterior
Basement, foundation, Crawlspace, and structure
Heating
Cooling
Plumbing
Electrical
Fireplace
Attic, insulation, and ventilation
Doors, windows, and Interior
Bathrooms
Summary: Home Inspection VS Appraisal
Home Appraisal | Home Inspection | |
Evaluation of the interior and exterior condition of a home | ✅ | ✅ |
Paid for by the buyer | ✅ | ✅ |
Evaluation of the home’s value | ✅ | ❎ |
Identification of the areas that need repairs | ❎ | ✅ |
Often required by mortgage lenders | ✅ | ❎ |
Don't leave your home purchase to chance—schedule a professional home inspection today to ensure peace of mind and a sound investment.
Contact us now for expert home inspection services and take the next step towards your dream home with confidence!