The Difference Between Appraisal and Inspection
Heritage Home Loans
Heritage Home Loans Spokane, WA
Published on May 4, 2017

The Difference Between Appraisal and Inspection

What you need to know about appraisal and inspection when buying a home.

When you buy a house, chances are you will have both an appraisal and inspection on the property. There is a big difference between them. The home inspection is set up by you and your Realtor. It is done so you can protect the investment you are making in the home. The appraisal is set up by the lender to ensure the home’s value and condition meet the loan and lender’s requirements.


The Home Inspection is done to evaluate the overall condition of the property. The home inspector is chosen by you (the buyer).  And give you a detailed overview of the properties condition. The inspector will do a complete examination of the properties foundation, electrical plumbing etc. The inspection is a general overview of the property. The inspector may advise you to have further inspections on certain parts of the property by professionals that work in a specific field (i.e roof or sewer).

**Pro Tip: If you are buying an older home you may want to have the sewer inspected. Especially if you are buying a home on the South Hill in Spokane. From personal experience, I can tell this could save you a lot of money down the road.

After the inspection, they will present you with a detailed report of their findings. The list will have the problem areas broken into a few different categories. The first one is a list of items that will need to be fixed right away as they may cause further damage or affect the home’s value. The other categories will have different degrees of seriousness. Some will be items that should be addressed sooner than others.

The inspection is completed at the beginning of the process. When signing a purchase and sale agreement you will have an inspection period that allows you to have your home inspection and negotiate with the seller for repairs to possible issues the property may have.

In some cases, a home inspection isn’t required but is highly recommended. You will set the inspection up with a realtor. It is important that you go over the report with your realtor and discuss all the potential issues with the property.

The inspection is typically paid to the inspector at or near the time of the inspection. This cost is usually separate from the closing costs you will pay your lender at the closing table. The cost of an inspection varies but will run between $300-$500


What happens if the inspection goes bad?

If the inspection reveals minor issues with the property you will negotiate with the seller to have them fixed. Major issues with the property may lead you to walk away from the purchase of that home if negotiations with the seller go poorly.


An Appraiser is contracted by the lender to give their opinion of the value of the property. The appraiser will follow established guidelines to create their estimation of the value. The property you are buying or refinancing will be compared to properties within a certain radius and that were recently sold. These are called comparable properties.

The lender will order the appraisal. Lenders have an independent panel of appraisers that are chosen randomly through a computerized system. Your lender is prohibited from influencing any part of the appraisal. The appraisal fee is usually paid as a part of your mortgage’s closing costs.

What does the appraiser look for?

Here is a basic list of what the appraiser looks at during his inspection of the home and property.

  • General condition and age of the home
  • Size of home and property
  • Location of the home
  • Features of the home (i.e., 3 bedrooms, 2 baths, etc.)
  • Major structural improvements, such as additions and remodeled rooms
  • Architectural features, such as skylights and fireplaces.

The appraiser will also make sure the property meets the guidelines of the loan program you are using. Each loan program has different requirements for the condition of the property. The listing agent usually provides a list of financing options on the property’s marketing materials. This list will be the financing options they believe the property will qualify for. Some properties won’t meet any loan program’s guidelines. These homes will likely only accept cash or renovation loan offers.

What happens if the appraisal goes bad?

The appraisal report will be based on value and condition. If the value is low, you will most likely have to renegotiate the purchase price with the seller or adjust your down payment amount. If there are issues with the condition of the property, they will need to be resolved before the loan is able to close and fund. If you get an appraisal that has issues you will need to discuss the options with your Realtor and lender

Appraisal and inspection will most likely be a part of your home buying experience. There are some situations when an appraisal is not needed so be sure to ask your lender if that is an option for you.


Heritage Home Loans
Heritage Home Loans Spokane, WA
Click to Call or Text:
(509) 991-3493