Inspector vs. Appraiser: What’s the Difference?

Buying a home comes with a long to-do list, which often includes getting an appraisal and inspection of your potential new home. As a buyer, it’s important to make sure that you’re familiar with any potential problems the house has, no matter how minor. Additionally, it’s essential to make sure the amount you’re paying for your new home aligns with the fair market value price. A home appraisal can also help when it comes to getting approved for a mortgage loan.

Taking the steps to get a home appraisal and a home inspection can prove beneficial to both the buyer and the seller. This guide will explain the roles of an inspector vs. appraiser and the differences between the two.

Defining Inspector vs. Appraiser 

In order to understand how an inspector differs from an appraiser, it’s critical to start by defining both of these jobs. Here’s a closer look into the roles of an inspector and an appraiser so you can know which kind of professional you need during different stages of buying a house. 

Definition of an Inspector 

A home inspector is a professional who completes an in-depth walk-through to examine the safety and quality of a house that is going to be listed on the real estate market. An inspector will thoroughly examine a number of different aspects of the home, including both the interior and the exterior. 

Typically, the home inspection process will take between three to four hours, although this can vary depending on the size of the home. The price generally runs from $300 to $500, and it is the responsibility of the buyer to cover this cost. 

Definition of an Appraiser 

A home appraiser will focus on examining the house to determine its true worth — its fair market value. The cost for a home appraisal generally spans between $300 to $600, and the buyer is responsible for this cost, unless they negotiate to get the seller to pay for it.

There are two types of appraisers: certified real estate appraisers and licensed real estate appraisers. A certified appraiser has the certification to appraise multimillion-dollar, complex residences, while a licensed appraiser can only appraise properties with up to four dwelling units when the value of the sale is up to $1,000,000.

The Differences: Inspector vs. Appraiser

An inspector and an appraiser both play an important role in the homebuying process. Having defined the role of an inspector vs. appraiser in a real estate transaction, here are some of the key differences between the two. 

Inspector: Looks at the Condition of the Home

The job of the home inspector is to evaluate the condition of the property. Unlike a real estate appraisal, a home inspection only looks at the house itself and does not compare it to other properties. During their evaluation, a home inspector will look at the following: 

• Roof 
• Plumbing 
• HVAC system 
• Windows and doors
• Drainage 
• Foundation 
• Electrical system 
• Presence of sufficient fire and carbon monoxide alarms

A home inspector will also be looking for:

• Any visible signs of mold
• Any signs of pests, including termites and rodents 
• Moisture or water damage on the foundation, walls, or floor

Appraiser: Looks at the Market Value and Comparable Properties 

The primary role of an appraiser is to assess the market value of a home. In order to accurately assess the appraised value of the home, a real estate appraisal will consider the following factors:  

• Age of the home
• Location of the home
• Square footage
• Number of bedrooms and bathrooms
• Any upgrades or additions made
• HVAC system and water heaters
• Roof material and condition
• Pool, firepit, or other outdoor amenities

Additionally, one of the key differences is that an appraiser will look at comparable properties in the area that are for sale or that have recently sold. This will help the appraiser to discern if the home’s asking price is aligned with its fair market value. 

Different Types of Reports

While the home inspector and appraiser play different roles, another key difference is in the type of report they produce. A home inspector will provide a home inspection report, which usually takes around three or four days for the inspector to produce. A home inspection report is divided into four key areas: structural, electrical, plumbing, and HVAC system (looking at heating, ventilation, and air conditioning).

An appraisal report, on the other hand, will include the date of the appraisal, a brief description of the house, a succinct overview of comparable properties and the local market analysis, and the signature of the appraiser. Most appraisal reports are produced within 24 hours. 

Loan Requirements

The majority of mortgage lenders have certain stipulations that you must fulfill in order to receive a mortgage loan. Most mortgage lenders will require a home appraisal during the homebuying process, which serves as a way for a bank to protect their investment and gauge the risk of making a loan. 

While a home inspection is recommended as a way to protect the homebuyer, mortgage lenders typically do not require them.

Common Questions About an Inspector vs. Appraiser 

Now that we’ve looked at some of the key differences between inspectors and appraisers, here are some common questions that you may be wondering about during the homebuying process. 

Do I Need Both? 

A home inspection is not required for potential buyers, which means whether or not they choose to involve an inspector is up to them. However, while it’s not a requirement, a home inspection is a worthwhile investment — and one that you most likely won’t want to skip. A buyer will get a more comprehensive overview of their new home’s condition with a home inspection, as well as an understanding of any present or future repairs that need to be addressed. 

When it comes to a home appraisal, the overwhelming majority of lenders will require an appraisal to finance the loan. This will give the mortgage lender the confidence that the market value of the property is the same as the loan amount. In fact, home appraisals are required for all Federal Housing Administration (FHA) loans in California.

How Does Hiring an Inspector vs. Appraiser Impact Me — as a Buyer or a Seller? 

When it comes to buying a house, the majority of potential homebuyers will want to order a home inspection. By doing this, the buyer has the opportunity to learn about any issues with the home, whether seen or unseen. Additionally, getting an appraisal on the house will assure the buyer that the seller is selling the home at a fair price. If the asking price and the appraisal amount do not match, the buyer then has the option to use the appraisal as a negotiating tool with the seller. 

Buyers are traditionally the ones who order a home inspection on a house, but occasionally a seller will conduct a home inspection as they’re preparing to sell their home, before the house is listed. This gives them the opportunity to fix any potential issues and make sure they are asking for enough money for their listing. 

Start Your Homebuying Journey With Aalto

Now that we’ve detailed the differences between an inspector vs. appraiser, you’re one step closer to embarking on the process of becoming a homeowner. Whether you’re a first-time homebuyer or returning to the market, Aalto is here to assist you at every step along the way. At Aalto, we prioritize buyers and sellers and directly connect them together so you won’t need to hire a real estate agent. 

If you have questions during your real estate transaction, our licensed professionals are there to provide advice or help resolve potential issues. Our easy-to-use, self-service platform helps homebuyers and sellers have a smooth and transparent real estate transaction. Sign up on Aalto today, and find your dream home on your terms and in your time frame.