Reuben Saltzman

Inspections vs. Appraisals

When I tell people what I do for a living, a common response I get is “So you’re, like, an appraiser, right?”

No.  I’m not.

While home inspectors and appraisers both look at houses, must be independent, objective, and impartial, our jobs are quite different.

The primary purpose of a home inspection is to educate the buyer about their new home, so they can make an informed decision on the purchase.  The primary purpose of an appraisal is to protect the lender’s assets; this is done by determining the value of a home.  The value of a home will be highly dependant upon what other properties in the area are worth, and whether the subject home is in overall better or worse condition than the comparison homes (referred to as ‘comps’) .

A home inspector’s client is the buyer, whereas the appraiser’s client is the lender.  A home buyer is responsible for finding an excellent home inspector, who has only the client’s interests in mind.  The home inspector gets paid whether the home is sold or not.  As a side note, a home inspector should never allow their inspection fee to get rolled in to the closing costs; this means that the home inspector now has a financial interest in the home being sold to the buyer!  As for appraisals, the bank will typically decide who does the appraisal, and the buyer has very little to do with it.

Home inspections are almost always performed with the buyer.  Some home inspectors (such as myself) want the buyer to attend the entire inspection, while others ask the client to show up at the end.  For appraisals, it’s a little more mysterious.  The buyer doesn’t attend the appraisal, they may not be told when the appraisal will happen, and they aren’t given a copy of the appraisal – not to say they can’t get a copy, but remember, the lender is the client; not the buyer.

The bulk of the work for a home inspection is performed at the subject home, while an appraiser will spend a relatively small portion of their time at the property.  A home inspector spends several hours at a home doing the inspection, and must also generate a report, which may be produced on site, or might be produced later from their home or office (or even a restaurant…).  An appraiser’s work consists of much more research about all the other properties in the area, and the report must include detailed information about other comps.  On average, the on-site portion of an appraisal can be done within 30 minutes.

In short, a home inspector determines the condition of the home, whereas an appraiser develops an opinion of value for a home.

Reuben Saltzman, Structure Tech Home Inspections – Email Home Inspector in Saint Paul