Many buyers, especially first-timers, confuse these two services. They are completely different. Here is a clear breakdown of what each one does, who orders it, and why you need both before you close on a home in Portland or Southwest Washington.
What Is a Home Appraisal?
A home appraisal is an assessment of the market value of a property. An appraiser is hired by your lender to determine whether the home is worth the price you are paying. The lender wants to make sure they are not lending more money than the home is worth. The appraiser compares your home to similar homes that have recently sold nearby and produces a written opinion of value expressed as a dollar amount.
If the appraised value comes in lower than the purchase price, your lender may not approve the full loan amount. An appraisal is required by most mortgage lenders and is a standard part of nearly every financed purchase.
What Is a Home Inspection?
A home inspection is an assessment of the physical condition of the property. A licensed inspector examines the structure, systems, and components of the home to identify defects, safety issues, and items needing repair or maintenance. The inspection is for your benefit, not the lender’s.
It tells you what condition the home is in, not what it is worth. A home inspection is not required by law in Oregon or Washington, but it is strongly recommended for every buyer. It is the only way to find out about hidden problems before you are legally bound to the purchase. Our guide on what a home inspector actually checks explains the full scope room by room.
Who Orders Each One?
The lender orders the appraisal. You pay for it as part of your closing costs, but the appraiser’s client is technically the lender. You order the home inspection. You choose the inspector, you pay for it directly, and the report belongs to you. For tips on picking the right person, see our guide on how to choose a home inspector in Portland.
What Happens If the Inspection Finds a Big Problem?
In Oregon, you typically have an inspection period (usually 10 business days) to complete your inspections and negotiate. You can ask the seller to fix items, reduce the price, or in some cases cancel the contract under the home inspection contingency. The appraisal happens separately and on a different timeline.
Once your report is in hand, see our guide on what to do after a home inspection in Oregon and how to negotiate after a home inspection.
Does an Appraisal Replace an Inspection?
No — and this is a critical distinction. An appraiser is not looking for defects. They are establishing market value. An appraiser who notices an obviously missing roof might note it, but their job is not to crawl the attic, enter the crawlspace, test every outlet, or run the plumbing. Only a licensed home inspector does that.
Buyers who waive the inspection to compete in a hot market are taking a significant financial risk. Read more about whether you should skip the home inspection in a competitive Portland market.
The Bottom Line
The appraisal answers: Is this price fair for this home? The inspection answers: Is this home worth buying at any price? You need both answers before you sign closing documents.
If you are a first-time buyer, our First-Time Homebuyer’s Complete Guide to Home Inspections covers everything you need to know in one place.
Russ Motyko is a Certified Master Inspector serving the Portland metro and Southwest Washington, licensed in Oregon (#1898) and Washington (#1856). Thermal imaging included on every inspection. Same-day reports. Available 7 days a week.