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Why do I need to pay for both a home inspection and an appraisal?

weekly commentary - opes advisors - rob chrisman


If you are getting a mortgage you will most likely need to pay for an appraisal and if you are buying a home, you should pay for a home inspection.


While both the appraiser and home inspector look at, or inspect, the property, each is doing so with a different purpose. The appraisal evaluates the property as collateral, the inspection evaluates the condition of the property.


Many borrowers are surprised at how little time most appraisers spend at the property. Keep in mind that the appraiser’s purpose is to objectively determine the fair market value of the property in comparison to other similar properties that have sold, and are on the market, in the vicinity for the lender. The appraiser notes the similarities, differences and prices of the properties to evaluate and compare the properties to arrive at a value of your property. The appraiser will also note if certain compliance laws are being followed (smoke and carbon monoxide detectors, strapped and raised water heaters), and if there are any noticeable issues visible by cursory inspection that can create a safety hazard or impact value.


We tell our clients that the purpose of a home inspection is to thoroughly inspect all the physical attributes of the property and test all the mechanical systems. The inspector will crawl under the home and up on the roof. Put electrical instruments in all the plugs. Turn on all the faucets in the sinks and showers and then flush the toilets. Walk the perimeter of the building looking for cracks and how water drains. Heating and cooling systems turned on and off. If appliances are included, they will also be tested. The floors and flooring will be noted for wear and tear. Depending on the age of the property, there will some flaws, some wear and tear. The important aspects of the inspection are any items that need costly repairs or replacements soon.


We remind our clients that there are potential issues in brand new construction as well dependent upon the quality of workmanship when the house is being built. Never assume that because it is brand new it is perfect.


Opes Advisors, A Division of Flagstar Bank, is neither a law firm nor a certified public accounting firm and does not provide legal or tax advice. Consult your accountant or tax advisor for advice specific to your situation.

Information is accurate on the date of publication. Please check with a Mortgage Advisor and consult with your tax advisor for current information related to your specific situation.

Programs only for qualified borrowers. All borrowers subject to credit approval and underwriting terms and conditions. Programs subject to change without notice. Some restrictions apply.

Opes Advisors, a Division of Flagstar Bank | Member FDIC | Equal Housing Lender