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The Difference Between Home Appraisal and Home Inspection: Why Both Are Necessary

Updated: May 3

Home Inspection and Appraisal

It is difficult for most homeowners and home buyers to identify the difference between a home inspection and a home appraisal. Sure, both of these sound almost the same, but they are quite different.

Home inspections address the integrity of your home's physical structure and appearance. However, an appraisal deals with the value of your home.

Even though these have different uses, they are a very important part of your home buying process. Furthermore, there is a high chance that your mortgage loan approval might necessitate either one or both. Hence, knowing about home appraisals and detailed inspections won't be a bad idea. In this blog, you will better understand these two important steps of your home buying journey.

What Is An Appraisal?

A licensed appraiser performs a home appraisal, which is a way to estimate the home's fair market value. If you plan to buy a house, this is one of the most essential steps. There is a high chance that your mortgage lender might require this before approving your loan.

If you think these are only for homebuyers and approving mortgage loans, you're mistaken. Anyone who needs a professional opinion about their house's worth can get a home appraisal done.

An appraisal is an expense that a potential buyer is supposed to cover. But, let us assure you, this is not an unworthy expense. Whereas the mortgage lender typically hires the appraisers and arranges the process.

The next thing that we're sure you must be wondering is the cost of a home appraisal. These costs vary, depending on different factors. These factors include:

  • Home's location

  • Type of mortgage

  • Loan's size

  • Type of the property

Generally, you can expect it to range from $300 to $500.

Besides home buyers, home appraisals can also be effective for home sellers. Sellers can employ home appraisals to ensure that their pricing is correct. This sort of appraisal is known as a "pre-listing assessment."

What Home Appraisals Include?

  • Evaluation of the home's neighborhood/location

  • Evaluation of the similar or comparable homes in the area

  • Evaluation of the size of the home

  • Evaluation of the home's interior and exterior condition

  • Evaluation and determination of the home's fair market value

What Is A Home Inspection?

A home inspection is a process for identifying a property's condition and defects within a property.

Above, we mentioned that in many conditions, home buyers are required to have a home appraisal, but this is not the case with home inspection. A home inspection is always a choice. Not to mention, they are indeed a very smart decision homebuyers make in their home buying journey.

Furthermore, in some cases, a loan program might require a home inspection as part of your mortgage application's part.

After making an offer as a homebuyer, you can hire one of the best home inspectors in Milwaukee WI, and visit your desired home to perform an inspection. A home inspection plays a very crucial part in protecting you. After getting the home inspection results, the buyer can choose from the following options to decide further:

  • Walk away from the deal

  • Buy the house as-is

  • Attempt to negotiate with the sellers

  • Ask the sellers to pay for the repairs before closing the deal

Home inspection costs entirely depend on what a Milwaukee home inspector will charge. Their charges can range from $300 to $500, but, like home appraisals, they depend on several factors, such as the home's location and size.

What Home Inspections Include?

  • Evaluation of the exterior and interior structure of the property

  • Evaluation of the home's utility systems (HVAC, plumbing, water, electrical) and structure

  • Identification of the needed repairs

What Home Inspections Do Not Include?

  • An evaluation of the size of the home

  • An evaluation of the home's location and neighborhood

  • An evaluation of the comparable homes in the area

  • An evaluation and determination of the home's worth

Similarities Between Home Inspection and Appraisal

Besides serving different purposes, home inspection and appraisal do have several similarities.

Benefiting the homebuyer

Even though both of these occur in different instances, both of the services ensure that the buyer is getting the best out of their investment. An appraisal ensures that it is worth the money. Similarly, an inspection serves as a guarantee for its safety.

Uncovering potential issues

Both of the services are very effective in uncovering issues that might not be apparent to the naked eye. This not only makes the home free of major defects, but it also lets the homebuyer feel confident in their decision.

Unbiased Services

These services are performed by third-party professionals who can never play bias with the home inspection or appraisal results. A Milwaukee home inspector and a home appraiser have nothing to gain or lose from those results. Hence, this makes the homebuyer feel confident in their decision.


The cost of an appraisal and inspection particularly lies in the same range ($300-$500), and the prospective homebuyer usually pays for these.

Differences Between A Home Inspection And Appraisal

Even though home inspections and appraisals involve a home examination, they both serve different aims (you must have gotten a very clear idea about this till now). Here are some of the major differences between these two:


The purpose of a home inspection is to focus on a particular property and all of its major components. It is a way to evaluate a home's condition and determine its safety and integrity. On the other hand, home appraisal's purpose lies in determining the true value of a home.

Buyer's Presence

During home inspections, homebuyers are often encouraged to walk through the home during an inspection. This lets the homebuyer make informed decisions regarding their desired home and ask questions from the home inspector. In contrast, a home appraisal doesn't require a buyer's presence. After finalizing their report, the appraiser reveals the results of their findings to the homebuyer, home seller, and lender.

Parties Involved

Home appraisals usually involve a buyer, the buyer's lender, and the seller. Whereas the home inspections only involve the homebuyer and the home seller.

Required vs Optional

While mortgage lenders usually require a home appraisal, an inspection is typically not necessary and is always an option for the homebuyer.

Ready to make your home-buying journey smooth and secure? Contact Homesight, Inc today for expert home inspection services you can trust. Schedule your inspection now and ensure your new home perfectly fits you and your family!

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