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bank appraisal Vs Home Inspection

Whether you’re thinking about selling your home or buying a home in Calgary, it’s important to understand the difference between a bank appraisal and a home inspection.  In fact, one of the most common real estate misconceptions is that a bank appraisal and a home inspection are one in the same.

There are many reasons why a bank appraisal and a home inspection are different.  Buyers and sellers who believe they are the same or similar end up being surprised when they are informed they are not.

What Is A Bank Appraisal?

An appraisal is an unbiased, professional opinion of a homes value that is completed by a professional appraiser.  Appraisals are performed in real estate transactions when a buyer is taking advantage of financing through a lender and  sometimes when a homeowner is attempting to refinance their mortgage amount.

The primary purpose of a bank appraisal is to ensure that the sale price that a buyer and seller agree upon is not more than the current market value of the home.  A bank appraiser ensures the contract price is appropriate given a homes condition, features, and location.  In the event a buyer defaults on their mortgage the bank completes the appraisal to ensure they can recoup the money they lent to the borrower.

*Whether buying or selling a home, it’s important to understand that there are some problems can arise.  Being aware of a common issue, when a home can appraise for less than the agreed sale price.

What Is A Home Inspection?

When a buyer is purchasing a home they have the right to complete a variety of different types of inspections and there could be many specifics you need checked.  The most common inspection that is performed by a buyer is a “general inspection” of the home by a licensed home inspector.  A general inspection of a home is a detailed investigation into a homes plumbing, electric, Hvac systems, roof (if no snow) and other aspects of the home.

A general inspection is the most common, but it is not the only inspection that a buyer has the option to include in the offer to purchase. If you are buying a Rural Property then you will need a Well & Water Test (unless it’s Co-op water, then you may just need a water analysis) and a Septic Tank & Field test (unless it’s municipal) And your inspection may not be limited to just those.

When They Are Both Completed

One of the biggest differences between an appraisal and a home inspection is when they are done.  The buyer and seller agree to terms of a real estate contract, a buyer has a specified number of days from acceptance to complete the various inspections they make an offer contingent on (the condition period).  The amount of days can vary, depending on the number of inspections the buyer needs.

Once a buyer is satisfied with the inspection results, a bank appraisal will go in and complete his part.  An offer can fall through for various reasons and the inspection is one of the most common. This might not always result in getting more money off the home unless they are big items (and then it is the buyers decision). If there are small things that need done, the seller will usually agree (via an addendum agreed by both parties) to fix them before possession. 


Most home Calgary inspections take 2-3 hours depending on the size of the home. The appraisal visit should take between 30 minutes to an hour.  It is in your best interests whether you’re buying or selling a home that you take time to understand the differences, so that there are no surprises.

The major takeaway is that an appraisal is completed to protect the lenders interest and home inspections are completed to protect the buyers interests.


Data is supplied by Pillar 9™ MLS® System. Pillar 9™ is the owner of the copyright in its MLS®System. Data is deemed reliable but is not guaranteed accurate by Pillar 9™.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.