What’s the Difference Between a Home Inspection and an Appraisal?

Home Inspection

Purchasing a home is one of the most significant financial decisions people will make in their lifetime. Understandably, buyers want to do everything in their power to ensure they make a wise purchase, which is where appraisals and inspections come in. While the two terms are often confused, there are many differences between appraisals and a 4-point home inspection.

What’s the Difference Between a Home Inspection and an Appraisal?

The critical difference between an appraisal and a home inspection is their purpose. An appraisal is completed to determine the home’s value, and an inspection is conducted to assess the home’s condition and identify areas needing repair.


Mortgaging a home requires an appraisal because lenders want to be sure the property is worth the money they are loaning you to buy it. When an appraisal is conducted on your home, the appraiser will walk through the house to get a general feel for the home’s condition. Then, the rest of the calculating will usually be completed in their office.

The appraiser will look at the sale price of comparable homes in your area, the home’s features, location, and any upgrades or renovations that have been done to determine the fair market value of the property. Appraisers are licensed professionals and usually charge several hundred dollars for their services. If you are purchasing a home outright with cash, you do not have to have an appraisal performed.


When you have an inspection completed on a home you plan to purchase, the inspector will perform a comprehensive review of the home’s condition. Unlike an appraiser who only completes a brief walkthrough, an inspector will spend hours examining every aspect of the house. They will look for visual signs of damage and physically test things like outlets, faucets, exhaust fans, and doors and windows.

Licensed inspectors receive extensive training to identify current and potential issues and recommend what problems should be repaired before closing. If you are purchasing a house with cash, an inspection is not mandatory, but buying a home without one is ill-advised. Inspectors can catch problems with your foundation or electrical system that could cost thousands of dollars to fix, preventing you from purchasing a money pit.

4-Point Home Inspection

A 4-point home inspection focuses on the four essential components of your home; electrical, HVAC, plumbing, and roof. As these four systems are expensive to repair and replace, this type of inspection is well-suited to buyers who don’t want a full inspection done but still want to do their due diligence before purchasing a house.

Buyers who are only worried about specific issues may also prefer this type of inspection since it is less expensive and takes less time to complete. Alternatively, sometimes you may need a home inspection on a house you already own to have it insured. An insurance company may require this type of inspection as it allows them to understand a home’s condition.

Purchasing a home without having an inspection completed is a gamble. Even if you don’t plan on using the inspection results to negotiate, having one performed so that you are aware of issues with your new home is wise and could keep you from being saddled with expensive problems.