Are Home Inspections & Home Appraisals the Same Thing?

by Lee Grayson
Home inspectors examine electric systems to determine the available power supplies.

Home inspectors examine electric systems to determine the available power supplies.

House inspectors and home appraisers look at some of the same things, but the two professionals have distinctly different purposes. Buyers and sellers voluntarily hire inspectors to examine a property to look for damage and make suggestions for repairs in a formal report. Lenders require a formal appraisal to determine the current value of the house under consideration for a mortgage. Buyers typically use inspection reports to determine home condition; lenders use appraisals as reasons to approve or deny home mortgages.

Property Inspections

Property inspectors make detailed investigation of the home without making any assessment of the worth of the property. Sellers occasionally hire inspectors to complete a preliminary report to identify problems to prepare the house for the sale market. Buyers pay inspectors to examine the home for potential problems, and typically ask permission to conduct a property inspection as a provision of the sale contract. Lenders making loans in geographic areas with termites, including southern California and Arizona, generally require the borrower to supply a termite report from a pest control company showing the home is free from insect infestations.

Inspection Focus

The property inspection focuses on the condition of the structure, including the age and condition. Inspectors estimate the useful life left in the home mechanicals, including the heating and cooling systems, and the roof. Specialty home inspectors focus on one area, such as roofs, insulation and energy use and closely inspect this feature. Inspectors provide detailed written reports to the seller or the home buyer. Some inspectors tour the home with the homeowner or buyer after the inspection and point out problems listed in the written report. This allows time for questions and discussion about possible ways to repair or replace items listed as damaged or inoperable on the inspection report.

Home Appraisals

Appraisers work as independent agents licensed by the state to assess the value of a piece of property. Lenders and some potential homeowners hire appraisers to ensure the price to be paid for the home matches with other homes having similar features that have recently sold in the neighborhood. Appraisers completing reports for loans backed with federal funds, including Fannie and Freddie Mac, or loans taken under the Veterans Administration or Department of Agricultural Rural Development, must complete detailed, standardized reports supplied by these agencies.

Appraisal Focus

Appraisers determine a value for the property by looking at the structure, land parcel and comparable home sales in the same neighborhood or general geographic region. The appraiser considers the age of the house, roof, mechanicals and the type of foundation, such as slab or basement. Inspectors factor in the home features and give more value to homes with swimming pools, high-quality bathrooms with tiled showers and jetted bathtubs. Kitchens with high-end appliances and granite counter tops also may appraise at higher prices compared with kitchens with basic features and laminate counter tops. Some appraisers use a standardized value list for home features, while others make a holistic judgment based on their professional experience.

About the Author

*I have written chapters and articles for Oxford and Harvard University Presses, ABC-CLIO, and others. Arcadia Press published two of my local history texts and I have also written for numerous "article sites," including Pagewise in 2002. My "How to become a...real estate agent" is available as an online text from a Canadian publisher. *I taught writing courses at a branch campus of Indiana University. *I held a California real estate license and have remodeled four of my own homes and advised others on financing homes, repairing credit to qualify for loans, and managing construction (including meeting local, state, and federal regulations for restoration and development grants). *I served as an AmeriCorps*VISTA volunteer and wrote nearly $75,000 in small education grants (under $1,000). *My travels include frequent road trips in Canada, Mexico, U.S., and Europe. I attended school at Cambridge University and used this as a base to explore the UK and Europe.

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