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Appraisal vs Inspection

Understanding the Difference Between Home Inspection and Appraisal: How a Home Inspection Can Save You Money


Appraisal vs Inspection

When it comes to buying or selling a home, two essential processes come into play: home inspection and appraisal. While these terms are often used interchangeably, they serve distinct purposes. Understanding the difference between a home inspection and an appraisal is crucial for both buyers and sellers. In this post, we'll explore the dissimilarities between these two processes and shed light on how a home inspection can actually save you money in the long run.


A home inspection is a comprehensive evaluation of a property's condition, conducted by a certified home inspector. The primary objective of a home inspection is to identify any existing or potential issues with the property, such as structural problems, electrical issues, plumbing leaks, or safety concerns. It is usually initiated by the buyer after their offer is accepted, during a period of time determined in the negotiations usually from 2 days to three weeks.


An appraisal, on the other hand, is an unbiased assessment of a property's value conducted by a licensed appraiser. The primary purpose of an appraisal is to determine the fair market value of the property. It is typically required by the lender to ensure that the property's value aligns with the loan amount. The appraiser and inspector are two different people.


The key differences between a home inspection and an appraisal lie in their objectives, scope, and the parties involved. A home inspection focuses on the property's condition and functionality, while an appraisal is primarily concerned with its value. A home inspection involves a detailed examination of the property's structure, systems, and components, whereas an appraisal relies on market research and comparable property analysis to determine if its value is in range or if the lender should not be risking an undue amount of money on a home that will not be worth the loan amount the buyers intend to borrow.


Getting a home inspection is crucial for buyers as it provides them with a comprehensive understanding of the property's condition. It reveals hidden defects or potential issues that may require costly repairs in the future. Armed with this information, buyers can negotiate repairs or adjustments in the sale price, potentially saving them from making a poor investment. This is true for not only pre-owned homes but for new construction as well. I find just as many issues with new construction as I do with older homes, but many people are more reluctant to have a full, comprehensive inspection on their newly constructed homes; that is a mistake.

For example, while inspecting a new home last February I noticed that the bathroom tile in a brand-new, single family home felt hollow when I stepped on it. This typically indicates that the adhesive on the tile has separated the tile from the concrete. After doing a moisture reading of the floor, I determined there was moisture under the tile. The buyer brought this to the builder’s attention, and later the builder found that a water pipe had burst under that bathroom slab. Without an inspection, that would have gone unnoticed and the damage would have been substantial.


Sellers can also benefit from a home inspection. By proactively conducting a pre-listing inspection, sellers can address any underlying problems before putting the property on the market. Although not many sellers take advantage of this option, it is becoming more popular in many markets and for good reason. Having a comprehensive inspection before you list your home puts you at a real advantage. You are able to make necessary repairs or disclose the issues upfront, preventing potential buyers from negotiating a significant reduction in the sale price and allowing you to price your house correctly for the quickest possible sale.


The cost of a home inspection is relatively small compared to the potential expenses associated with undiscovered defects or structural issues. Identifying problems early on allows buyers to factor in repair costs or negotiate a lower purchase price. Additionally, a comprehensive home inspection report can help buyers prioritize repairs and maintenance, saving them money in the long run by preventing major issues down the line. Most licensed home inspectors are extremely qualified and like any other professional you want to take your time and choose one you feel comfortable with using. Are they professional and personable? Can they explain things clearly to you? Do you like the layout of their report? Is the report going to be delivered that day or will you be waiting a week?

You will have the home inspection for the duration of your home ownership, it’s yours to keep. The appraisal typically stays with the lender.


An appraisal and a home inspection are both important parts of the home buying process and inspectors and appraisers are professionals you can depend on to help you out as you navigate the home buying process. You usually have no choice in who appraises your home, but you have complete control over your inspection. Make sure you use the information and your inspector’s professional expertise to your advantage.


As always, feel free to reach out!






Sean Finney

Pivotal Home Inspection

Florida Licensed Home Inspector

352-398-2357

sean@pickpivotal.com




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