Home Buyers, Home Tips, Inspection, Wausau, Wisconsin

Inspection Vs Appraisal – What’s the Difference?

Inspections and Appraisals

A common question many buyers have when looking for their first home or fourteenth home is what is the difference between an inspection and an appraisal. The answer is pretty simple, yet it’s easy to get the two confused. Here’s a quick summary of the purpose of both the inspection and appraisal.


An inspection is conducted by a state-licensed inspector, who typically spends 2 – 5 hours observing the condition of a home and formalizes the results in an inspection report. An inspection often includes a thorough analysis of the home’s condition including cosmetic blemishes and sub-surface concerns. This may include highlighting plumbing, electrical, foundation, roof, mold, and other overlooked concerns to the buyers attention. Although most inspectors are not specialized contractors, they often can identify when a concern should be further assessed by a specialized contractor, or if it is simply a cosmetic concern.

It is common for an inspector to conduct the entire inspection and then invite the buyers to the last 30-minute summary to review the findings. After reviewing the results, the inspector formalizes the information into a report that can be as short as a 1-5 pages or a short book of 50-60 pages.

The older the home is, likely, the longer the inspection report will be. As a buyer, it’s important to understand the inspector’s goal is to help educate you on the condition of the home, but not everything in the inspection report may require remediation. Talk the inspection report over with your Realtor to come up with the best strategy.


On the other hand, an appraisal is a third-party assessment of the home’s value. In most situations we hear the word ‘appraisal’ from our lenders / banks as it’s often a requirement for obtaining a loan. This assessment is conducted by an appraiser, who is an independent, state-specific licensed contractor.

An appraiser’s role is to determine a value evaluation of the home based on the home’s condition and comparing that to recently sold homes and currently available homes in the area. From here, the appraiser proposes a value and supporting summary of their findings in an appraisal report.

From a lender’s perspective, a third-party appraisal ensures they are making a solid loan on a home that is worth what the buyers are paying. In the event of a foreclosure, the lender can recover the amount of money loaned against the property.

From a buyer’s perspective, an appraisal gives them another value to validate the purchase price of the home. Although it does provide some information about the condition of the home, an appraisal is not often used to determine the condition details of a home. Similar to a comparative market analysis, an appraisal value can change over the years, as much of the data supporting the home’s value is based on variable market conditions.


Overall, both the inspection and appraisal are helpful in a real estate transaction. Although the nature of each home sale or purchase is vastly different, it’s best to partner with an experienced, local agent who can help you navigate each of the steps along the way.

This article was brought to you by:

Austin Solomon, Coldwell Banker Action (715) 212-4693
Schofield, WI
October 25, 2018

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