Over half of prospective homebuyers polled in a recent Ipsos survey didn't understand the difference between a home inspection and a home appraisal. Let's clear up any confusion right now.

        The purpose of a home inspection is to give the client (whether buyer or seller) a deeper understanding of a property's physical condition. Most home inspections are commissioned by buyers, so that they may make a more informed decision about their purchase. It's increasingly common, however, for sellers to commission inspections, so that they may have an opportunity to address defects prior to listing, and so, price their properties more accurately.

        The inspector examines the property (including its foundation, roof, ceilings, walls, windows, doors, floors, basement, and heating/cooling, plumbing and electrical systems), then gives the client feedback, pointing out the property's strengths, the work needed to keep it in good condition, and any problems needing repair.

        The purpose of a home appraisal, on the other hand, is to assess a property's value, as opposed to its condition. Home appraisals are commissioned by lenders, prior to approving a mortgage, in order to ensure the loan amount doesn't exceed the home's value and that the lender could reasonably recoup their loss by reselling the property should the buyer default.

        Performed by certified appraisers (typically chosen by the lender and paid for by the borrowers as part of their closing costs), appraisals can take into consideration comparable sales, the property's condition and location, and local market conditions. Also included in the appraisal report can be an estimate of the time it would take for the property to sell.