Appraisals Versus Home Inspections: What You Need to Know

When you buy your first home, you should be familiar with two essentials before you close: an appraisal and a home inspection.

The differences

When it comes to an appraisal versus an inspection, both are important.

An appraisal is required by BB&T when we finance your new mortgage. It's a process that helps determine the fair market value of the home you want to buy.

An inspection, on the other hand, requires you to hire a home inspector who should carefully examine your home from top to bottom, inside and out. The inspector should note the condition of the home's major structures, features and components.

The main difference between an appraisal versus an inspection is that an appraiser provides an estimate of what the home is worth, while a home inspector educates you about the overall condition of the home and alerts you to any issues or concerns.


In most cases, the homebuyer pays for the appraisal. But it's important to know the lender is the actual client of the appraiser—not you. The lender provides you a copy of the appraisal once it's complete.

The purpose of the appraisal is to make sure the price you offered to pay for the home—which helps determine the size of the mortgage you'll need—is fair and reasonable given current market conditions.

An appraisal that indicates the home is worth less than your offer doesn't mean you can't buy the house. A lower appraisal could provide a bargaining chip that allows you to negotiate a lower purchasing price.

Home inspections

Home inspections are a good way to protect yourself in this big investment. An inspection can reveal problems you may not notice immediately, such as issues with plumbing, the roof or other major parts of the home.

If an inspection report comes back fairly clean, it should give you peace of mind. However, if your inspector uncovers significant issues, you may be able to rescind your purchase offer—or at least use the findings to renegotiate your offer. Another option for you is to ask the seller to take care of the issues before you buy, saving you time and money before you take over as the new owner.

Keep it up. You're getting smarter about home buying.

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