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The Differences Between a Home Inspection and Home Appraisal

Update: This blog post was updated in July 2021 with additional information regarding the differences between home appraisals and home inspections.

The Differences Between a Home Inspection and Home Appraisal

If you’re looking to buy or sell a home, you might be wondering about the differences between a home appraisal and a home inspection. Though both of these processes will require an assessment of the home, one way to help remember key differences is through this lens – the home inspector will be working for you (as a buyer or seller) and the home appraiser will be working for a bank or lender.
So, what do appraisers typically look for? And why get a home inspection? Looking through the lens we mentioned above, we’ll dive into the answers to these questions, the finer details of inspections versus appraisals, and more in our article below.

Appraisals and Inspections: Key Definitions

Knowing the definitions of “home inspection” and “home appraisal” is the first step in understanding the key differences between them. At their base levels, the definitions for these two terms are as follows.

Home Appraisal: What Is Your Home Worth?

In the home appraisal process, a licensed appraiser will visit a home to perform a general assessment walkthrough that will help them estimate the home’s fair market value. Appraisers will use the findings from their walkthrough in conjunction with details from comparable homes and home sales in the area to determine the final numbers in their appraisal value. When lending and mortgage financing are involved, a home appraisal gives banks and lenders the peace of mind that they will be providing buyers with a loan option that aligns directly with the calculated value of the home and not one that goes over its value, especially if the bank would need to sell off the house for any reason.

Home Inspection: What Issues Need to Be Addressed in the Home?

In the home inspection process, a licensed inspector will visit a home to perform a longer and more thorough inspection of the home’s condition to determine any potential issues that need to be repaired or addressed. This process focuses on the home’s physical condition and does not include comparisons between similar sales in the area. When it comes to protecting a homebuyer and the big investment they are about to make with a new home, a home inspection is extremely important. Though some buyers will choose to purchase a property “sight unseen” (without an inspection – and sometimes without an appraisal) for the majority of buyers, the home inspection process can save a future homeowner both dollars and headaches in the future.

What Do Appraisers and Inspectors Look for?

As we mentioned in our introduction, the main objective for appraisers is to work with the bank or lender who will be involved with the sale of the home. An inspector will work directly with the homebuyers and sellers. Both of these processes will require ‘inspections’ of the home but to different degrees.


  • Make sure the house qualifies for the type of loan you are intending to get

  • Verify that the interior and exterior of the house, overall, are safe and in fairly good condition – typically via a visual inspection without the buyer/seller present

  • Compare your home and all of its features, amenities, and upgrades to similar homes and sales in the area

    • They will use these types of data points when determining the home’s value


  • Provide a much more thorough inspection of the home’s overall stability and its interior and exterior spaces – which can include: 

    • The roof

    • The Foundation

    • Crawl spaces

    • Attic

    • Basement

    • Garage

    • (And more)

  • Test other major functionality points of the home such as:

    • Electrical systems

    • Plumbing systems

    • Appliances

  • Can walk through a home with the buyers (or sellers) present to point out the potential issues they spot

Do You Have to Get Your Home Inspected and Appraised?

Inspections aren’t often ‘required’ in most home-buying or selling situations, but when it comes down to it, our team always recommends getting a home inspection done. With an inspection, you – especially if you are a homebuyer – have the chance to dig deep into the home you are about to invest in. If there is something in a crawl space that needs to be fixed, an inspection will catch it, and you could have the opportunity to negotiate with the seller to get the issue addressed.
Appraisals will often be required in situations where a loan will be used to finance the purchase of a home (note that ‘all-cash’ sales will not necessarily require an appraisal). Lenders will require the appraisal to ensure the right amount of money is loaned to a buyer. Appraisals can help buyers similarly too. When an appraisal is done, you can be assured that you will be paying a fair and reasonable amount for the home you are interested in.
The bottom line? Appraisals and inspections differ in the scope of their assessments and their overall end goals. Appraisals are used to determine how much a house is worth and inspections identify present and potential issues that should be addressed. Both services can benefit all parties in the buying and selling process, and we recommend that both are utilized in the decision-making process.
If you are looking at buying or selling a house in the greater southwest Missouri area and need additional guidance on the home inspection or home appraisal process, don’t hesitate to reach out to the Sturdy Real Estate team. We’ll be happy to make your buying or selling experience as stress-free as possible.

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