Inspection vs. Appraisal

What's the Difference?

When purchasing a home, buyers may receive two property-related reports to consider - a home inspection and a home appraisal.  These reports serve completely different purposes, and one is optional and one is required by the mortgage lender.

 

 

DETERMINES PROPERTY CONDITION
This report is ordered by and completed solely for the individual(s) purchasing the home. It helps determine the condition of the property and its systems in great detail. It is not required by the mortgage lender and is, therefore, optional.

 

DETERMINES PROPERTY VALUE
This report is required by the mortgage lender when a home purchase is being financed. The appraisal is used to determine the fair market value and the general physical condition of the property being purchased.

HOW MUCH DOES IT COST?
$350–$550
Home inspection costs vary depending on the complexity of the inspection and the size of the home being inspected.

HOW MUCH DOES IT COST?
$350–$500
Home appraisal costs vary slightly depending on the size of the home and whether the home will be an investment property or a primary residence.

HOW AND WHEN IS IT ORDERED?

A home inspection is ordered by the buyer and his/her agent with an inspector of their choosing shortly after the buyer’s offer is accepted. Most states’ real estate contracts stipulate that the buyer has 10 days from the date of contract acceptance to complete the inspection and communicate any issues to the seller.

HOW AND WHEN IS IT ORDERED?

The mortgage lender typically waits to order the appraisal until after the home inspection is completed (if the buyer decides to do a home inspection). Per government-regulated guidelines, the mortgage lender is required to randomly assign an appraiser to an appraisal order.

WHEN IS THE REPORT DELIVERED?
The home inspection report is generally delivered to the buyer within 24 hours from the time the inspection was completed.

WHEN IS THE REPORT DELIVERED?

Typically, home appraisals are delivered to the mortgage lender within 5–7 business days from the time they are ordered.