Home Inspectors vs Appraisers — What’s the Difference?

So you’ve found the home of your dreams. It has all the bells and whistles you’ve been looking for, and it’s in an ideal location.

Once the seller accepts your offer, the fun has only just begun. You have many things left to do before you can put down the welcome mat. Home inspections and appraisals are two vital stops along the way in your home-buying journey.

In this article, we look at home inspectors vs appraisers to discuss the differences and similarities between them. We want to help you be more prepared when it’s time to buy your home.

What’s the difference between an appraisal and inspection?

You may wonder what the difference is between appraisals and inspection. Both are third-party contractors whose job is to evaluate a structure. Both are vital to buying or selling a home. Each plays a very different role in the home-buying process.

An inspector determines whether a home is suitable for moving in. The appraiser determines how much your home is worth. 

When you’re purchasing your new home, here are some things you should know:

What does a home inspector do?

Home inspectors thoroughly examine the interior of a home. They look at the structural components, as well as internal systems. The home inspector then documents and shares any issues that they run across. 

Home inspectors typically check the following elements of a home:

  • Structural elements — including foundation, roof, floors, and walls.
  • Internal systems — such as heating and air conditioning systems.
  • Electrical — such as the wiring and having an adequate circuit breaker.
  • Plumbing — checking for leakage, proper routing, and up-to-code pipes.
  • Property grounds — drainage, septic system, driveway, and sidewalk.
  • Safety measures — adequate smoke detectors, fire escape routes, among other safety concerns.
  • Fixed appliances — such as dishwashers or garbage disposals.

Make sure your inspector has access to all areas of the house. If access to any area is blocked, the inspector may ask to reschedule.

What does an appraiser do?

An appraiser goes through a property and looks at various features to estimate the property’s market value. 

When performing an appraisal, the contractor does a walk-through of the property. They take pictures and write down notes as they look through the structure and the surrounding area. Appraisers typically look at the following features while doing their on-site walkthrough. 

  • Number of bedrooms
  • Number of baths
  • Square footage
  • Basement finished or unfinished
  • Attic finished or unfinished
  • Home fixtures — stove, built-in microwave, and other such amenities

After going through the property, the appraiser performs an analysis, which includes the information from their notes and photos. They include other data as well, such as the proximity to schools and sale prices of other nearby homes.

Once they’ve analyzed all the information, the appraiser compiles a report that includes the following information:

  • The property’s value
  • Photographs of the home’s exterior, including a street view
  • Square footage and how the area was calculated
  • An outline of comparable recent home sales in the area
  • A sketch of the building’s exterior
  • Public records that may be relevant to the value of the building — tax records, land records, and such.

The contractor sends a copy of the report to the bank and a copy to you. Once the bank has viewed the report, they’ll determine the extent of the loan they’ll provide.

When does a home inspection happen vs. an appraisal?

You hire a home inspector when the seller accepts your offer on a home and before you sign the purchase papers. You usually have 7-10 days from the time of the offer to get the inspection done. 

Some home lenders require a home inspection. With others, it may be optional. Either way, it’s a good idea to get an inspection before closing the deal. If the inspector runs across any issues, this may give you room to discuss a lower price. You may also get the seller to take care of some of the repairs before finalizing.

Banks require an appraisal before giving out any kind of home loan. The lender chooses a contractor to assess the property’s value after you apply for a home loan. The assessed value is a key indicator of how much the bank can lend. If the property appraises for less than the agreed price, you’ll need to renegotiate with the seller before the bank will approve the loan.

How much do home inspections cost vs. appraisals?

A home inspection will typically cost between $280 and $400. It’s a good investment because inspectors ensure you don’t run into any unexpected surprises, and it often saves thousands in repair costs down the road.

Home appraisals usually run $300$400. It’s around $600 to have a multi-unit home appraised. Unless you negotiate with the seller ahead of time, it usually falls on the buyer to cover the appraisal cost.

Home inspector vs. appraiser careers

Though someone can do both jobs, most home inspectors and appraisers stick to one specific field. Nothing is preventing a person from being both. You can legally be a home inspector and an appraiser in most locations. However, there is some debate over the ethics of doing both.

Home Inspector vs. appraiser salary

Generally, home inspectors make 3% more than real estate appraisers. According to Indeed, home inspectors make an average base salary of $60,227, while real estate appraisers make $58,501.

Both provide stable opportunities. However, home appraisal is a reliably more in-demand career track because home appraisals are mandatory, whereas home inspections, while strongly recommended, are not required.

Overall both home inspection and home appraisal careers offer significant benefits. You can freely move across the country with minimal (if any, in the case of home inspectors) re-certification needed, which means that you have a lot of freedom to experience new cities and cultures. The base and average salaries for both are robust, and another tremendous plus side is that you’ll have great insight into the home-buying process when it’s your turn to get into the real estate market.

What qualifications do a home inspector and an appraiser need?

The home inspector

Home inspector qualifications vary from state to state. Some states have licensing requirements, while others don’t. For those that require licensing, each has different renewal guidelines. 

Necessary skills for a home inspector include: 

  • A good working knowledge of the city’s building codes and the state they work in.
  • Strong organizational skills.
  • Knowledge of structural design, engineering, or construction is helpful.

Some inspectors choose to go into a specialized services, such as thermal imaging or mold inspections. These services require additional training and knowledge.

The appraiser

Real estate appraisers need to be strong in math and understand property markets. Unlike inspectors, appraisers don’t usually need to comprehend building codes in-depth. 

Some skills necessary to be a real estate appraiser include:

  • Analytical skills
  • Knowledge of local and regional real estate markets
  • Computer skills — for running analytical software, spreadsheets, and scheduling.
  • Strong organizational skills
  • Good verbal and written communication skills

Can someone be a home inspector and an appraiser?

No universal rules exist to prevent someone from going into business to do both. However, if you search the internet for a home inspector and an appraiser, you’re probably going to find one or the other. You’re likely not going to find a business that does both.

Typically the bank sends the appraiser even though the buyer pays for the service. In most places, you’re able to choose your home inspector. There are no rules to keep someone from performing both functions. However, it’s highly unlikely that you’ll be able to find someone who does both jobs.

What do home inspectors need to know about appraisals

The two functions seem similar on the surface. Appraisers and inspectors both examine the property and determine the structure’s condition. However, they each conduct their inspections for entirely different reasons. Each procedure takes place at different ends of the home-buying process. 

Typically there’s no overlap between the two. Inspectors don’t take the appraisal into account when examining the property. Appraisers likewise don’t concern themselves with the results of a home inspection.

While there are many other stops along the home-buying adventure, we wanted to present you with the functions of these two essential steps. Knowing what to expect and how to navigate a home inspection and an appraisal will give you a headstart in the greater home-buying journey.