Appraisal or inspection

Both walk the house. Only one is telling you whether to buy it.

An appraisal answers what it is worth. An inspection answers what is wrong with it.

They get confused constantly, usually right when a buyer is deciding which one to skip. Here is the clean version of the difference.

Two professionals outside a residential house, one standing with a clipboard near the front steps and the other crouched examining the foundation wall.

Side by side

Two reports, two questions

The appraiser protects the lender's collateral. The inspector protects you. Those are not the same interest.

Appraisal

What is this property worth?

Ordered by: The lender, usually through an appraisal management company
Paid by: The borrower, on a loan
Who performs it: A state licensed or certified appraiser
Main output: An opinion of market value as of a specific date
Condition: Noted only where it affects value
Required: Effectively yes on most mortgages
Who gets the report: The lender, with a copy to the borrower

Home inspection

What is wrong with this property?

Ordered by: The buyer, directly
Paid by: The buyer
Who performs it: A home inspector, licensed in many but not all states
Main output: A list of defects, safety issues and remaining service life
Condition: The entire point of the visit
Required: No, it is a choice
Who gets the report: You

Why a buyer usually wants both

An appraisal coming in at or above the contract price tells you the lender's collateral is sound. It tells you almost nothing about the furnace, the roof, the wiring or the drainage. An appraiser is not crawling the roof space or testing outlets, because that is not the assignment.

Skipping the inspection because the appraisal came back fine is the single most expensive misunderstanding in this whole area. The appraisal was never looking for those problems.

Where they touch

The overlap that does exist

They are not entirely separate. An appraiser does report condition where it bears on value or on lender requirements. Visible damage, an unsafe condition, a roof at the end of its life or missing handrails can all appear in an appraisal, and on some loan programmes can trigger a required repair and a reinspection.

The difference is depth and intent. The appraiser notes what a reasonable inspection of the property reveals as it affects value. The inspector goes looking for problems on your behalf and has no view on what the house is worth.

One practical consequence. An appraisal that flags a condition issue can hold up your loan. An inspection that flags one gives you negotiating room. Same defect, two very different effects.

Certified appraisers

For the valuation half

Three appraisal practices, each licensed and working their own market.

Arizona

Tyler Kane at TyCorp Inc, Certified Residential Appraiser and FHA approved across north Phoenix and the northeast Valley.

TyCorp Inc

Utah

Weston Groll at Apex Appraising, Utah Certified Residential Appraiser covering 52 cities in 8 counties.

Apex Appraising

Nationwide

Pocket Appraisal, arranging residential appraisals across the country.

Pocket Appraisal

Questions

Common questions

Do I need both an appraisal and an inspection?

On a financed purchase you will almost certainly have an appraisal whether you want one or not, because the lender requires it. The inspection is your choice and it is the one working for you. They answer different questions, so having one is not a substitute for the other.

Will the appraiser find problems with the house?

Only the ones that affect value or that a loan programme requires them to flag. They are not testing systems, running appliances or entering crawl spaces to hunt for defects. Treating an appraisal as a condition report is how people end up surprised after closing.

Can the appraisal kill my deal?

It can complicate it. A value below the contract price creates an appraisal gap, and what happens next depends on your contract. An appraisal contingency typically lets you renegotiate or walk. Required repairs flagged on some loan programmes can also delay closing until they are completed and reinspected.

Which one happens first?

Usually the inspection, because the inspection period in a purchase contract tends to run early and the appraisal is ordered once the file is progressing. That order suits you, since the inspection is the one that informs whether you still want the house at all.

Get in touch

Not sure which one you need?

Describe where you are in the process and what you are trying to find out.