What’s the Difference Between an Inspection and an Appraisal?

What is the difference between an inspection and an appraisal? This is a question that many, often first-time, home sellers ask. Understandably, both terms refer to similar areas of a property. But while they include assessing a property, they do so for entirely different reasons.

What Does a Home Inspection Entail?

A home inspection is a vigorous examination of a home to determine its condition and to uncover any problems. Generally speaking, a home inspection involves a thorough examination of elements like the home’s exterior, plumbing, electrical system, basement, attic, roof, and overall structure. 

Once the inspector has finished the process, they will then write a report of their findings. The report describes what was inspected and outlines anything that could be a problem in the future. 

You will then need to make a decision based on the findings. You may, for instance, decide to walk away altogether. Or, as T-Square Real Estate advises, you may want to negotiate with the seller about lowering the sale price.

What does a typical home inspector look for during an inspection?

Basically, inspectors look for failed systems, damages, and repairs. The inspection report forms the basis for renegotiating the sale price, allowing the seller to make the repairs, pulling out of the sale, or continuing with the purchase. Here are the details of what the appraiser will look out for:

  • Roofing

    An inspector may look at the roof’s shingles, tiles, and flashing to determine its state.

  • Plumbing

    Here, a typical inspector will at the state of the drain systems, vents, waste systems, and piping.

  • Electrical

    The goal here is to check and verify that all electrical components are working as they should. An inspector will, therefore, look at critical electrical.

  • Heating/Air Conditioning

    This will entail the inspector checking the functions of the entire air conditioning and heating system.

  • Ventilation/Insulation

    The inspector will note the insulation of the crawl space and vapor retarders.

  • Appliances/Interior

    The inspector will cite the number of windows, doors, floors, stairways, counters, and cabinetry on the inspection report. The inspector also notes any items that are damaged.

How to Prepare for a Home Inspection

Truth be told. You may not be able to sell your house if you end up getting a bad inspection report. As such, it’s critical for you to prepare adequately for the inspection. You want to get ready by:

  • Making sure that electrical, water and gas services are turned on, and that gas pilot lights are lit.
  • Replacing any burned-out light bulbs. This can help you avoid the inspector writing a “light inoperable” report that may suggest an electrical problem.
  • Testing all smoke and carbon-monoxide detectors are replace any dead batteries.
  • Replacing or cleaning a dirty heating, ventilation, and air conditioning filters and ensuring they fit correctly.
  • Removing items that block access to the HVAC system, the crawlspace, attic, electrical service panels and water heaters.
  • Unlocking any locked areas to provide the inspector with easy access, such as the doors to the basement or attic, or the electrical service panel.
  • Trimming tree limbs so that they are at a safe distance (10 feet) from the roof.
  • Repairing or replacing any broken or missing items, such as screens, windowpanes, downspouts, gutters, and chimney caps, and latches, locks and doorknobs.

What Does a Home Appraisal Entail?

A home appraisal is a process that almost all mortgage lenders require. Home appraisals help determine a home’s estimated market value. To determine the value, a home appraiser will consider things like the property’s location, its condition and the value of similar properties that have been sold recently in the area. 

Depending on the size and complexity of the home, a home appraisal can take anywhere from a couple minutes to several hours. And just like an inspector, a home appraiser will also prepare a report. 

What does a typical home appraiser look for during the appraisal process?

During a property evaluation, a home appraiser will look at key features such as the:

  • Home’s Exterior

    An appraiser will pay attention to the roof, walls, and the foundation.

  • Property’s Size

    An appraiser will also look at both the size of your home and lot.

  • Interior’s Condition

    Here, an appraiser will look at things like the home’s windows, doors, flooring, walls, plumbing, and electrical system.

  • Home Improvements

    A new floor, HVAC system, new appliances, a renovated kitchen or bathroom are all important considerations for the appraiser.

How to Prepare for A Home Appraisal

There are a couple of things you can do to make the appraisal process as smooth as possible. You can:

  • Consider making all the required repairs.
  • Improve your property’s curb appeal.
  • Inform the appraiser of all the improvements you have recently made and provide all the documents and receipts.

After the appraisal, the appraiser will usually take anywhere between two to seven days to provide you their report.

While they may seem like competing entities, they are not. They are merely processes meant to provide as much clarity about the condition of your property as much as possible.