Home Inspection vs. Appraisal: Why You Need Both

Buyers often ask why they should pay for a home inspection when the lender already ordered an appraisal. The answer is that the two do different jobs for different people. One protects the lender. The other protects you.

Home inspection vs. appraisal

What an appraisal covers

The appraiser compares the home to recent sales and gives the lender an opinion of value. On FHA and VA loans, the appraiser also checks that the home meets basic safety and condition standards. See the VA Minimum Property Requirements checklist for what that includes on a VA loan.

Even then, the appraiser is not inspecting the home in detail. They don’t test every outlet, run every appliance, or look inside the electrical panel. A home can appraise at full value and still need thousands of dollars in repairs.

What a home inspection covers

A home inspector works for you. A standard inspection usually reviews:

• Roof, gutters, and attic
• Foundation, basement, and crawl space
• Electrical system and panel
• Plumbing and water heater
• Heating and cooling systems
• Windows, doors, and insulation
• Signs of water damage or leaks

You receive a written report with photos. Depending on the home, you may also want a radon test, a sewer line inspection, a well and septic inspection, or a termite inspection.

What you can do with the results

The inspection usually happens shortly after your offer is accepted, during the inspection period in your contract. Based on the report, you and your agent can:

• Ask the seller to make repairs
• Ask for a credit or a lower price
• Accept the home as it is
• Walk away, if your contract allows it

Without an inspection, you have none of those options, because you won’t know there is a problem until after you own the home.

Should you waive the inspection to win the house?

When several buyers want the same home, some waive the inspection to make their offer stand out. That means buying the home without knowing its condition. There are ways to stay competitive and still protect yourself:

• Shorten the inspection period. A quick turnaround is less of a burden on the seller.
• Inspect for information only. Agree not to ask for small repairs, but keep the right to cancel over a serious problem. Ask your agent how this works in your contract.
• Bring a strong pre-approval. Sellers want certainty that the loan will close. Here’s what makes a pre-approval reliable.

Frequently asked questions

Is a home inspection required to get a mortgage?

No. Lenders require an appraisal, not a home inspection. The inspection is optional and protects you as the buyer.

What is the difference between a home inspection and an appraisal?

An appraisal estimates what the home is worth and is ordered by the lender. A home inspection evaluates the home’s condition in detail and is ordered by the buyer. A home can pass one and still have problems the other would find.

Who pays for the home inspection?

The buyer usually chooses the inspector and pays for the inspection. It is paid at the time of the inspection, not at closing.

Should I waive the home inspection to make my offer stronger?

Waiving the inspection means buying the home without knowing its condition. You can often stay competitive by shortening the inspection period or inspecting for information only. Talk with your agent before you give up the inspection.

Next step

If you’re getting ready to make an offer, I’ll make sure your pre-approval is solid and explain what to expect from the appraisal on your loan type. Call 219-695-0369 or text me at 219-758-8072.

Get prequalified here or send me a message.

Using a VA loan? See the VA appraisal FAQ for how the VA appraisal works.