Home Inspection

Evaluates the condition of the property.

• Usually ordered by the buyer.

• Conducted by a licensed home inspector.

• Focuses on defects, safety issues, and needed repairs.

• Results in a detailed inspection report.

• Helps buyers decide whether to proceed or negotiate repairs.

A home inspection typically covers:

• Roof and attic

• Foundation and structure

• Plumbing

• Electrical systems

• HVAC (heating and cooling)

• Windows, doors, walls and insulation

• Signs of water damage

• Installed appliances that are included within the scope of the inspection

The inspector does not determine the home's value.

Home Appraisal

Estimates the market value of the property.

• Usually ordered by the lender when financing is involved.

• Conducted by a licensed appraiser.

• Focuses on comparable sales, location, size, and features.

• Results in an appraisal report with an estimated value.

• Helps lenders determine whether the home is worth the loan amount.

An appraiser considers:

• Recent sales of similar homes nearby ("comps")

• Square footage and layout

• Lot size

• Location and neighborhood

• Age and condition of the home

• Upgrades and improvements

The appraiser does not evaluate the specific condition of the home.

A Simple Example

Suppose you're buying a house for $400,000:

• The inspection finds a leaking roof and an aging furnace. You might ask the seller to make repairs or lower the price.

• The appraisal determines the home is worth only $385,000. The lender may reduce the loan amount, requiring you to renegotiate or bring more cash to closing.

The easiest way to remember it

The home inspection tells you what condition the home is in

The appraisal tells you what the home is worth.

Both are important, but they answer different questions.