Understanding the difference between a real property appraiser and a home inspector can be confusing. How are they similar? Both roles focus on assessing real estate property, usually before it's sold. How are they different? Each role has a different goal and a different client to serve.
Want to know more? Let's dive in and unpack the differences between real property appraisers and home inspectors.
Appraisers vs. home inspectors.
Appraisers and home inspectors are both impartial, third-party professionals who provide key services during the course of a real estate transaction. Think of each role as two sides of the same coin – one that serves different parties with interests in a transaction.
A real property appraiser is a valuation expert trained to research, observe, and analyze a property – and provide an independent, impartial, and unbiased opinion of its value.
A home inspector is a skilled specialist trained to visually inspect the major systems and structural components of a property – and issue an objective report on its condition.
Appraisers assess property value.
Have you ever seen Pawn Stars? Real property appraisers are the Pawn Stars of real estate – usually without the dramatic personalities!
Appraisers are solely focused on determining the fair market value of a property. They do this using several methods, including:
Inspecting the inside and outside of a property and observing its size, characteristics, condition, features, improvements, and the surrounding area
Taking photographs of the property for documentation in an appraisal report
Researching and verifying legal descriptions of the property using public records
Analyzing comparable properties recently sold nearby to help inform value
Consulting sale trends in the local real estate market and the surrounding neighborhood
Home inspectors assess property condition.
Have you ever had a physical at the doctor? Home inspectors are kind of like the doctors of real estate, but often with better bedside manner!
Home inspectors are solely focused on determining the condition of the home. They do this by evaluating its major components, including:
Structural components such as the foundation, floor, walls, ceiling, and roof
Exterior areas including doors, decks, balconies, eaves, flashing, trim, walkways, driveways, and patios
Plumbing systems
Electrical systems
Heating, ventilation, and air conditioning (HVAC) systems
Interior features such as doors, windows, countertops, installed appliances, stairways, railings, and garage doors
Fireplaces, chimneys, and venting systems
4 ways appraisers and home inspectors are similar.
Appraisers and home inspectors share some similarities in how they work, their training, and their average pay.
#1: Both provide important services during real estate transactions.
Both appraisers and home inspectors perform key services during real estate transactions. Their respective reports are often used in buyer and seller negotiations.
For example, if a home’s appraised value comes in lower than a buyer’s offer – what's known as an appraisal gap – the buyer may use the appraisal report to renegotiate the purchase price with the seller. Otherwise, the lender has a good reason to deny the buyer’s loan and the deal usually can’t move forward.
Similarly, if a home inspection report reveals serious defects and costly necessary repairs, the buyer might use it to renegotiate the purchase price with the seller. Or they might ask for seller concessions and, in some cases, back out of the deal.
#2: Both need specialized training.
Both appraisers and home inspectors need specialized training to learn the best practices of each job and develop expert skills.
In every state, real property appraisers are required to become licensed in order to independently appraise property. Appraiser licensing involves completing Qualifying Education (QE), earning required experience hours, and completing advanced coursework to earn an upgraded license. Licensure guidelines may vary slightly by state. But all states must meet the minimum licensing standards established by the federally authorized Appraisal Foundation in its Real Property Appraiser Qualification Criteria.
On the home inspection side, in most states, home inspectors must earn a license before they can offer services. As of June 2023, 35 states require home inspection licensing while 15 states and Washington, D.C. do not. Regardless, it’s important for home inspectors in both license and non-license states to complete a home inspection training course to master their skillset.
#3: Both can work independently or for an employer.
Once trained and/or licensed, both appraisers and home inspectors may choose to work independently for themselves or join a company. This kind of career freedom is one of the many draws in starting a career in appraisal and home inspection.
Working independently, appraisers and home inspectors can set their own hours, choose how much they want to work, have greater control over their income, and enjoy the ultimate career flexibility.
Working for a company, appraisers and home inspectors can have a steady source of client leads, a more regular paycheck, employer-sponsored benefits, and the chance to train and develop skills under a mentor.
#4: Both can build lucrative salaries.
Independent appraisers and home inspectors can build lucrative salaries. In both roles, salary ranges depend on the volume of appraisals or home inspections completed each week. Real property appraisers generally make between $300 and $450 per appraisal while home inspectors make between $400 and $600 per inspection. Of course, these ranges depend on the complexity of the property being appraised or inspected. But having greater control over your workload translates into an income that is virtually unlimited.
3 ways appraisers and home inspectors differ.
Appraisers and home inspectors differ in a few ways, too.
#1: Appraisers determine value, inspectors evaluate condition.
A real property appraiser determines only the fair market value of a property. A home inspector focuses only on evaluating the condition of a property.
Appraisers generally perform their services at the request of a lender, and their appraisal reports are typically used to confirm that the buyer’s (and loan applicant’s) purchase price is reasonable for the value of the property.
Home inspectors usually perform their services at the request of the buyer. Their home inspection reports are typically ordered by the buyer in an effort to learn as much as they can about the condition of a property before they buy it.
#2: Appraisers learn valuation principles, inspectors learn about property components.
During training, real estate appraisers and home inspectors learn different things. Appraisers learn property valuation principles, how to analyze and compare equivalent properties, the different methodical approaches of appraisal, and how to write appraisal reports.
Home inspectors learn about the key structural and systematic components of a home, how to visually inspect areas in a home, the best practices of a home inspection, what tools to use, and how to write inspection reports.
#3: Becoming an appraiser takes longer than becoming a home inspector.
Training to become a licensed appraiser generally takes longer than training to become a home inspector. This is because real property appraisal is a step-based career with certain prerequisites required in each step.
Most appraisers start their careers as trainees, completing QE and working under licensed appraisers to earn experience. There are three upgraded appraiser licenses trainee appraisers can earn, all of which allow them to work independently. Each credential requires a certain amount of added coursework, hourly experience, and a passing exam score to qualify for licensure. This process can take six months to a few years to complete.
Home inspectors – in both license and non-license states – can usually complete their coursework, pass any required exams, and establish their businesses in 1-2 months.
Both appraisal and home inspection are poised for growth.
Homeownership and real estate investment remain enduring goals of many Americans. With just under 6 million real estate transactions completed in 2022 (and an increase projected for 2023), homebuyers, sellers, lenders, and real estate agents will continue to use the services of appraisers and home inspectors.
