If these two terms make you scratch your head, and wonder what in the world, you are not alone. We get asked this question every day. What is the difference between a home inspection and an appraisal? There’s a big difference.

The home inspection is the buyer’s opportunity to have the home looked at by a licensed home inspector or by any other licensed trades people who can give the buyer an objective assessment of the condition of the home. The buyer needs to know what they’re buying. You need to make sure that you have somebody check out the electrical, the plumbing, that HVAC, check the age of the roof, and make sure that the house is basically structurally sound. In the state of Alabama buyers buy homes as is. The seller is under no obligation to make any repairs to the home. However, those can be negotiated as a part of the purchase. Some repairs will be mandated by the appraisal.

The appraisal is an analysis of the condition and the value of the home ordered by the lender in order to protect their financial interest. The lender is looking out for their investment. They want to make sure that the property is worth/valued at the amount of money they are committing to invest in that property and they want to make sure that that property meets their minimum standards of condition. When you are borrowing money from a bank or any other lending institution, including a friend or family member, they get to make some stipulations on how you use their money. That’s where these minimum standards of condition come in to play. A lender will not lend money on a house that has rotten wood, peeling paint, leaky faucets, leaky roof, structural issues, etc.