A lot of times customers get confused as to what the difference is between a home inspection and an appraisal. Overall, the biggest difference is that a home inspection is reviewing the current state of the property and its systems. Whereas a appraisal is giving the overall value of the property compared to the local marketplace.
Let’s unpack what a home inspection is covering. The home inspector is going through the home reviewing the operable systems such as heating, cooling, electrical, plumbing, etc. They’re also looking for any signs of issues that may be happening where someone may not be able to see them. While the inspector can’t see through walls, they have the knowledge to be able to potentially find issues that have been lingering and are just beginning to show themselves.
The appraiser is doing an analysis of the value of the home comparatively to what other homes in the market have sold for. The appraisal is typically used in the banking process to be able to establish how much the bank is willing to lend on a specific property. While the appraiser is still going through the home and looking at it in its entirety they are not looking for or testing the operability of the systems. They are more so looking at what the home has in it for example does it have a fireplace, or a deck, or a master bathroom.
While both the home inspector and the appraiser are looking at the entire house both reports are significantly different in what they tell you about the home. Always make sure to review both the inspection report and the appraisal with your agent and the professionals.