What Is The Difference Between A Home Inspection And A Home Appraisal? 

Thomas Kelsey| HouseMaster Home Inspections Denver North| September 2021| Home Inspector

The road to homeownership is not easy. Like any industry, the jargon used in real estate is full of words you would not use otherwise, so it is easy to understand why we do not always get it right. Recently, I was at a school function for one of my children when a parent asked what I did for a living. When I mentioned that I inspect homes, the parent started asking me all kinds of questions about an appraisal he needed for his recent renovation and loan refinance.  The conversation continued, and it occurred to me that many homeowners and would-be homebuyers probably get home “inspection” and home “appraisal” confused.  After all, both services are part of a home purchase process and most of us are only buying a few in a lifetime. 

Both the home appraisal and the home inspection are important parts of the home buying process: they are assessments required to take a deeper look at the property to help all the involved parties in the sales process. It is completely understandable why buyers would have difficulty defining between the two; however, there are key differences between them.  Many buyers and owners are left asking, Do I really need both?  Let’s see.

 What is a Home Appraisal?

An appraisal provides valuable information for the buyer and seller, but an appraiser’s primary task is to protect the lender. Lenders do not want to own overpriced properties, so appraisers evaluate a home before the lender grants final approval for a buyer’s loan.

Although appraisers will take note if a house shows signs of neglect – from chipped paint to broken windows – this is not their primary focus in determining a home’s value. Instead, they will look at a variety of other factors, including:

  • Location
  • Proximity to desirable schools
  • Lot size
  • Size and overall condition of the home
  • Recent sales prices of comparable properties
  • Market opportunity

While appraisals can vary slightly among appraisers, they should not vary much, since real estate appraisers must adhere to state-sanctioned minimum standards and licensing practices.

What is a Home Inspection?

An appraisal is not a substitute for a professional home inspection. While the appraiser formulates an opinion of a property’s value, the home inspection will educate the buyer about the condition of the home and its major components.

The inspector will focus on the home’s existing and potential future issues, alerting buyers of any red flags or areas in need of repair. An inspection provides the buyer with the information they need to ensure they are making an informed buying decision. This could help the buyer negotiate a fair purchase price, give them an idea of the home’s safety and potential maintenance needs, and help them budget for how they can prioritize repair work that is needed.

Inspectors take a deeper look at a home’s overall condition and mechanical systems, including the state of the home’s 7 elements:

  • Roof and attic
  • Rooms and stairways
  • Basement and/or crawl space
  • Foundation and structure
  • Plumbing system
  • Electrical system and appliances
  • Heating and cooling system


As you can see, home appraisals and  home inspections are quite different, and yes, you really need both to satisfy two the needs of two very different actors in the drama that is buying a new home.  Understandably easy to get mixed up.  Most of us are not buying homes very often, which is why it is important to have a great REALTOR.  They understand where the story is going and what is needed in each scene to make this play unforgettable.  Their experience and knowledge will help guide you down the road to homeownership so you can sit back and enjoy the show.

 Thomas Kelsey

HouseMaster Home Inspections Denver North

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