Appraiser vs. Home Inspector – What’s the Diff?

Often before a property is purchased using a loan from a mortgage company, it must be appraised and inspected. Many homeowners confuse the appraisal inspection and the home inspection and ask me what the difference is. Here are some of the main ways that appraisals and home inspections are different and also overlap.

Different End Goals: Value vs. Condition

The main thing to know is a real estate appraiser’s focus is on determining the value of the home and those factors that will influence that value. A Home Inspector’s main objective is determining the condition. The Home Inspector is tasked with determining the condition of the property in terms of structural soundness and quality/safety of electrical and plumbing systems. The Home Inspector has an obligation to be accurate in their assessment of a home’s condition but they also act as advocates for the buyer. Their job is to point out any deficiencies with the house such as outdated/unsafe wiring or obvious problems with the foundation so that their client (the buyer) can make an informed decision about whether to purchase the house, negotiate a lower contract price, or just walk away all together. See the graphic below for many of the items a home inspector will be looking at (Source: www.gqre.com).

While an appraiser’s inspection of the property may take into consideration many of the things a Home Inspector looks at, his/her ultimate goal is to provide an opinion of value. The appraiser’s job is to provide their client (the lender) an accurate, well-supported, unbiased opinion of value. This usually includes commentary on the condition of the property since that is tied to value. For example, a 1960’s ranch home in original condition will most likely have a lower value than a 1960’s ranch home in the same neighborhood that has an updated kitchen and bathrooms. The appraiser’s job is to give the bank their opinion of market value (I go into this in more detail on a prior post - Market Value: Probable vs. Possible) which helps them determine if the mortgage be a good, sound investment for the bank.

Appraisal Inspection vs. Home Inspection

So how will you tell the Appraiser and the Home Inspector apart when they come to your home? Probably they’ll introduce themselves as either the Appraiser or the Home Inspector. Just kidding!

The appraiser’s site visit will usually take around 30 minutes and they will measure your house and look at all of the rooms including the basement. They will be noting the quality and condition of the finishes, the layout, bed and bath count, etc. They will take pictures of each room to include in the appraisal report. In some cases, like for an FHA loan, the appraiser may inspect crawl spaces and attics or test the basic appliances. But he’s probably not going to crawl under the house to inspect the foundation or get on your roof and walk around looking for leaks.

Appraisers try to look at the property through the eyes of the most probable buyer for that particular property – not only which features and attributes they find desirable, but also to what extent would the typical buyers be “inspecting” the home? A more simplified way to look at it is to ask yourself: “If I were looking to purchase this house, what are the things I would look at and what things would I hire someone with professional experience to check?” You may open a cabinet or two, look at the ceilings for leaks, take a look at the mechanicals to see if they are newer or may need replaced soon. But in my experience, very few buyers will be going into crawl spaces and bringing their ladders to get on the roof. They are mainly interested in the functionality of the house such as how many bedroom and bathrooms, whether they like the layout of the floorplan, etc.  Here is a great video from a Portland appraiser, Gary Kristensen, that shows you what you can expect when an appraiser visits.

A Home Inspector will really get into the bones of the home. They will get on the roof, get into the crawl space, and analyze the structural integrity. A good Home Inspector will be able to find possible issues that the Appraiser may not such as termites, faulty electrical wiring, plumbing that is not up to code, structural issues, leaky roof, mold, etc. Now that I’ve scared you with all the things that could be wrong with a house you’re looking to purchase (!), I highly recommend that if you are buying a home you hire a licensed Home Inspector to complete a full home inspection because they will be able to tell you things about the home that the typical appraiser is not going to. If you don’t know a good home inspector in Chicagoland, we recommend Inspectrum. Click here for their website and contact info.


If you have any questions, please don't hesitate to call us at (847) 863-5776. We specialize in appraisals for estates, divorce, pre-listings, bankruptcy, etc.

Property Questionnaire for Real Estate Agents

A couple of days ago I was sitting down to start writing a blog post on how to streamline the initial appraisal process, specifically gathering information on the subject property prior to doing the inspection. Over the weekend I listened to an episode of the podcast “Voice of Appraisal” where Phil Crawford mentioned an improvement worksheet that the Ohio Coalition of Appraisal Professionals (OCAP) has distributed to local area realtors. I recently contacted him and Steve Papin, the president of OCAP, who was kind enough to send me a copy. Here is the PDF (Property Questionnaire), or you can email me and I can send you the Word Doc that is formatted properly).

The main purpose of the questionnaire is to gather information that might otherwise be difficult to obtain. As you can see, the form provides the listing agent an opportunity to list all recent updates and any other details they would want an appraiser to know. Instead of springing all these questions on the agent at the time of the  inspection, by emailing a copy in advance they can have the time to do any necessary research and talk to their clients about the property before you even go there. And since it’s fairly often that a property is on a lock-box, you may not even meet the Realtor. Finally, at the end of the day you’ll have a document that can easily be saved to your work file.

In doing more research on these types of questionnaires, I saw that Ryan Lundquist of Sacramento Appraisal Blog, has also shared a “cheat sheet” that you can download here. This morning I was all set to wrap up my blog post by outlining even more benefits to these forms when I saw that Tom Horn, appraiser and author of the Birmingham Appraisal Blog, posted his own version of the “Property Questionnaire” here. So, clearly something is in the air folks! Tom’s blog post, as always, is top notch and has lots of good tips and suggestions for agents and homeowners alike.

I will most likely be creating my own form based on these three examples to include a section for any other additional features that the agent feels adds value to the property, or specific neighborhood info that the agent thinks is important. I suggest you do the same. Choose your own adventure or tailor one of these questionnaires to fit the Real Estate Agents in your own market! Once I’ve gotten mine whipped into shape, I’ll post it to my blog.

The Secret to a Stress-Free Appraisal Experience

Whether you are buying or selling a home, it can be a very stressful time and one of my goals is to provide a service that makes the experience as stress-free and transparent as possible. About a year ago, I received a phone call from a homeowner in the Edison Park neighborhood of Chicago who wanted to get an appraisal to help them determine a price to list their home. During the conversation he asked, “Why should I hire you?” It caught me off guard because usually the first question I get is, “How much do you charge for an appraisal?” (I won’t get into that here, but I can promise you that it is not a good idea to hire your appraiser based solely on fee. See my blog article, "The Cheapest Appraiser", for the reasons why.) His question really made me think about what separates me from other appraisers in my market area. I started thinking about the feedback I most often get from clients and what’s most important to me when it comes to how other people perceive my company.

I think it is important to state that there are certain fundamental characteristics that every good appraiser should have (ie. experience, local knowledge, education, attention to detail, standards and ethics, etc). While I possess all of those characteristics, I know based on what my clients have said time and time again that I provide something else that is invaluable to them. When I’m hired by a homeowner, most of time they are looking to either determine a price to list their home (FSBO or just needing a second opinion from an unbiased third party other than their Realtor) or determine fair market value when purchasing a home to make sure they are not overpaying. Most appraisers will come out and measure your home, take some pictures, and ask a few questions. Then several days later you get an email with a PDF of an appraisal report. You‘re anxious to see what value the appraiser has come up with and you open the report only to find that you have no idea what you’re looking at. Most appraisal reports are 30+ pages in length and filled with appraisal jargon and lending terms that the typical homeowner just doesn’t understand.

That's why it is important to take a different approach to these types of “non-lender” assignments. All of my appraisals involve two Consultations (one during the initial inspection and another after the appraisal report has been completed). During the first consultation I interview the homeowner to find out what their expectations are and explain how the appraisal process works. We talk about the house they are buying or selling, and I point out any items of concern I see during the inspection. Once the report has been completed, I typically have the second consultation in which I come back to the house and we go over the report together to discuss the following:

  • I explain how the report is laid out and where to find the most important information.
  • We go through the charts and graphs that I have added to the report and I explain the current market conditions and property value trends in their neighborhood and how that affected my value conclusion. These charts not only show an overall view of the median sales price trends, but also give an indication of of the amount of housing supply on the market. I explain what an undersupply or oversupply of housing stock could mean for the value of their home.
  • We go through the sales I used and I point out the differences in condition or quality of construction and which features are more desirable and why. I then show them the listings in the area that they would be competing against and what that means for their property. We also go over where these comparables are located on the map and discuss any location adjustments that were deemed necessary.
  • And maybe most importantly, I ask them if they have any questions. As you already know, buying or selling a home can be a stressful proposition, and I want to make sure that the appraisal/valuation portion of the process is as stress-free and easily understood as possible.

This is the portion of the appraisal process that my clients appreciate the most. By taking that extra time to explain the report and answer any and all of their questions, I ensure that they are satisfied. I want to make sure that the appraisal/valuation portion of the process is as stress-free and easily understood as possible. In working with homeowners, I have found that this is my favorite part of the business. It really allows me to help through this process is an easily understood way. This is a much different world than the lender/refinance world where rules and regulations get in the way of who you can talk to and what you can discuss. At a time when everyone is in a hurry to move on to the next job, I think it is important that you find someone who will take their time and make sure all of your questions have been answered.

Please feel free to email me or call me at (847) 863-5776 with any questions you might have.

How to Prepare For a Real Estate Appraisal Inspection

If you haven’t had an appraisal completed on your home recently, one of the first things that may come to your mind is, “What do I need to get ready for this?”.  Here are some helpful things you can do prior to the appraiser coming to your home.


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