Serving the Hudson Valley

Home Inspection. Appraisal. What’s the Difference?

Posted On: Feb 14, 2017

With all of the tedious steps in the mortgage closing process, it is no wonder some get the appraisal and inspection confused. Although both the appraisal and the inspection are important, there are some major differences between the two. Let’s break it down.

Home Inspection:

What's the Difference Between a Home Inspection and a Home Appraisal?A home inspection focuses on the condition of the home. A home inspector will spend hours analyzing the “bones” of the house and identifying any issue with the structure, and any problems with major appliances or mechanical systems such as the electrical, plumbing, or HVAC. An inspector will also point out any health or safety concerns like mold, radon, lead, or electrical systems that are not up to code. Keep in mind that although a home appraisal is required and a home inspection is not, an inspection is not something you will want to skip. Many inspections have saved buyers from purchasing homes that were plagued with hidden problems.

Home Appraisal:

What's the Difference Between a Home Inspection and a Home Appraisal?Since an appraiser’s main job is to protect the lender, a home appraisal takes the entire property into consideration when determining the value of a home. They will consider the lot size, any property features such as water access, in-ground pools, or views, and of course, the home itself. While an inspector looks at the “guts” of the house, and appraisal focuses more on overall condition, appearance, square footage, number of bedrooms and bathrooms, and the location. When considering location, things like the nearest school district, crime rate, and quality of public facilities are important.

So, how would you summarize the difference?

The appraiser formulates an opinion of the property’s value for the purpose of the lending institution finalizing the mortgage process.

The inspector’s role is to educate the buyer on the condition of the home and bring to attention any underlying issues that may need to be addressed before a final decision is made.