Blog · Buying
Inspection or appraisal? They are not the same thing, and the difference costs money
One protects you, the other protects the bank. Buyers who assume the appraisal will catch a bad roof find out at the walkthrough, when the contingency has already expired.
Updated August 20263 min read
What each one is for
The inspection tells you what is wrong with the house. The appraisal tells the lender what the house is worth. Neither one does the other’s job.
| Inspection | Appraisal | |
|---|---|---|
| Who it is for | You | The lender |
| Who pays | You | You, but you do not choose who |
| Who chooses | You | The lender, from a rotation |
| What it produces | A defect list, usually 30 to 60 pages | A value, in three to six pages |
| Typical cost | $350 to $600 | $500 to $800 |
| Is it optional? | Yes, and skipping it is how people buy a roof they cannot insure | No, if there is a loan |
The appraiser will not tell you the water heater is failing
An appraiser walks the property in twenty minutes to confirm it exists, matches the description and is not falling down. That is the extent of the physical examination.
They note obvious health and safety issues because a lender will not lend on a house with an active hazard, and on an FHA or VA loan the standards are stricter. But nobody is running the air conditioning, testing outlets, or getting into the attic. An appraisal that comes back at value tells you the price is defensible. It tells you nothing about the condition.
What happens when the appraisal comes in low
The lender lends against the lower figure, and the gap becomes your problem.
On a $500,000 contract that appraises at $480,000, the $20,000 is not financed. Your four options: renegotiate the price, pay the difference in cash, challenge the appraisal with better comparables, or exercise the appraisal contingency and leave with your deposit. Which of those is available depends on what your contract says — which is why the contingency language matters more than the price.
This happens more often in Florida condominium buildings with recent distressed sales than sellers expect. One assessment-driven sale in a building can drag the comparables down for a year.
What to do with a bad inspection report
Separate what is a safety or insurability problem from what is a maintenance list, and only negotiate the first.
Every 30-year-old Florida house produces a long report. The three items that actually matter here are the ones that affect whether you can insure and finance it: the age and condition of the roof, the electrical panel — certain brands are effectively uninsurable — and signs of water intrusion. Everything else is a budget, not a deal-breaker.
Perozo Molina Group · +1 689 680 1112 · WhatsApp +1 689 680 1112 · perozomolina.com
A real estate team at Miami New Realty, a licensed Florida real estate brokerage (licence CQ1020974), 2470 NW 102 PL Suite 107, Doral, FL 33172. This is an estimate, not a quote. The figures come from the sources named on the page this was printed from. Nothing here is tax or legal advice.