When buying or selling a home, you’ll likely hear about both an appraisal and a home inspection. While both are critical steps in the buying process, they serve very different purposes.
What is an Appraisal?
An appraisal evaluates a property’s fair market value. This process is typically required  to ensure the property is worth the amount being financed and is conducted by a licensed or certified real estate appraiser who is trained to analyze market data and assess the value objectively. The appraiser visits the home to observe key attributes such as condition, layout, size, functionality and then prepares a written report explaining and supporting their opinion of the property's market value. This report is primarily for the lender, but also offers valuable insights for buyers and sellers.

• What Does An Appraisal Report Cover?

  • The property’s key attributes such as size, condition, and features

  • Comparable sales (recently sold similar properties nearby)

  • Location and market trends

What is a Home Inspection?
A home inspection evaluates the condition of a property. This is typically done during the due diligence phase of a home purchase to identify any potential issues with the home’s structure or systems. This is generally required by the buyer and is conducted by a licensed home inspector who is trained to assess the physical condition of the property. The inspector then provides a detailed report highlighting any issues or repairs needed. This information helps buyers decide whether to move forward with the purchase, negotiate repairs, or even walk away from the deal.

• What Does It Cover?

  • Structural components (foundation, walls, roof)

  • Major systems (plumbing, electrical, HVAC)

  • Potential safety hazards, such as mold or faulty wiring

Do You Need Both?
Yes — both serve unique and essential purposes. While the appraisal ensures the home’s value aligns with the loan amount, the inspection helps you understand the home’s condition and any potential repair costs.

For example:

• An appraisal might confirm the home is worth the $300,000 contract price.

• A home inspection might reveal the roof needs to be replaced soon, which could cost $10,000+/-.

This dual approach protects both the buyer and the lender.
The Bottom Line
An appraisal and a home inspection are not interchangeable—they are complementary. The appraisal focuses on value; the inspection focuses on condition. Together, they provide a comprehensive picture of the property, helping buyers, sellers, and lenders make informed decisions.

If you have questions about the appraisal process or need help determining your property’s value, reach out today.