Inspections and Appraisals Explained

There are two parts of home buying that are quite important but rarely explained. These two components are the inspection and the appraisal. These items are powerful tools for you as the buyer. They give you more information about the home you are purchasing. The inspection and appraisal can sort of act like safe guards to protect the buyer – though that is not their sole intent.

Let’s talk a little bit about these two in depth.

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A home inspection is an examination of the current condition of the house done by a licensed professional. Inspections may be required by the lender during the home purchase process, but they also to benefit the buyer. If the lender requires an inspection, it isn’t a bad idea to have your own done as well. It gives the buyer an overview of the property condition and helps the buyer see the potential issues (instead of just what they want to see). If the lender doesn’t require an inspection, it’s easy to be tempted to skip it to save money. The decision is the buyer’s, but in the long run one just wants to consider what unknown issues they may have to deal with.

Inspections work like a physical. The buyer can see how the home is doing and find potential concerns, just like how a doctor checks a patient for sickness or complication. Here, issues are revealed and future maintenance is anticipated. An inspection isn’t the final word on issues, though. Inspectors are limited by what they can do and see. So, there are things an inspection won’t reveal, such as termite damage. An inspection can help keep the buyer from purchasing a lot of headache.

Get more info on inspections.


An appraisal is an unbiased professional opinion of a home’s value. Appraisals are used by the lender during the home purchase/ financing process to determine the current market value of a home. They need information about the home’s value to confirm that the amount they are lending is in line with the true to value of the home. Lenders won’t lend more than a home is worth. Appraisals are done by evaluating the home condition and by comparing the home to similar, recently sold properties.

A final report is written and provided to the lender that gives them the value opinion, as well as other details. It’s always good to ask for a copy of the final report so you can see the details for yourself. If you don’t agree with the results, you may be able to appeal or get a second opinion. Talk to your lender for details if you’re in this situation.

Find more appraisal education here!

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*Regardless of appraisal outcome, the buyer must pay for both the inspection and appraisal.

We hope this has been helpful!