Buying a home is a monumental step, full of exciting possibilities and important decisions. Most importantly, you understand the role of family assessments and testing. These two different processes are often confusing, but are essential to making an informed investment and avoiding unwelcome surprises.
Whether you’re looking to start fresh in your new home in Newnan, Georgia and understand the true value of your potential investments in Rocky Mount, North Carolina, you’re looking to uncover hidden issues before closing your rental property in Suffolk, Virginia.
Home rating vs. home inspection: What is the difference?
Both assessments and inspections occur during escrow and involve evaluation of the property, but their purpose and focus are fundamentally different. Think of them as two different lenses where you can see potential new homes.
Evaluation: Assessing property value and lender requirements
An evaluation is a professional assessment of the market value of a real estate. Its main purpose is to ensure that the lender is that the value of the home matches the loan amount. Lenders almost always need an evaluation when funding a home purchase.
The approved appraisers during the evaluation are:
Property Rating: They examine the condition, functionality and overall quality of the home. Check for comparable sales: The appraiser analyzes recent sales of similar properties in the region to determine fair market value. Generate Final Report: This report provides a detailed breakdown of its assessment and the rationale behind it.
The cost of a home valuation is usually the buyer’s expense. Although the exact price varies, Angi’s 2025 data shows that the average rating for a detached home was $357, with a typical range of $314-423. Several factors affect the final cost, such as the size and state of the property, such as the level of detail required for the assessment. Generally, valuing larger homes and property, or those in major cities or production areas, will earn you a higher rating fee.
Testing: Identify potential issues and protect your investment
On the other hand, home inspections involve a thorough investigation of the physical condition of the property. The goal is to identify existing or potential problems in your home, from structural issues to incorrect systems. Lenders usually do not require a home inspection, but we highly recommend it to buyers.
During home inspections, a qualified inspector will meticulously check various components of the home, including, but not limited to:
Foundation and structural roof and attic plumbing and electrical systems HVAC (heating, ventilation, air conditioning) appliance windows and doors
Inspectors will then provide a comprehensive report detailing the findings, including defects and safety concerns. The cost of the inspection is also usually paid by the buyer.
When do I need to get an evaluation and test?
For most home buyers, both valuation and inspection are essential. If you are funding your home, valuations are almost always a requirement from your lender. Even if you are buying a home with cash, it is still wise to get both a rating and an inspection. The assessment will ensure you have not overpaid the property and will protect you from the inspection of inheriting costly repairs.
In general, it is recommended to perform the test before the evaluation. This allows you to identify important issues that may affect the value of your home or your willingness to buy before the evaluation process is complete.
Rating Results: Navigate Low Ratings
Sometimes the rating is lower than the agreed purchase price. This can occur for several reasons, including rapidly changing markets and unique real estate characteristics. In the case of funding, lenders are lending only to valued value, so a low rating can present a hurdle.
If the rating is low, buyers using funding have several ways to explore.
Price Renegotiation: You can negotiate with the seller to lower the purchase price and match the valuation. Increased down payment: If you have the chance, you can cover the difference between appraisal and purchase price with a larger down payment. Challenge your assessment: In some cases, you may be able to try your rating if you think there are errors or overlooked comparisons. Leave: If you can’t reach the contract, you may have the option to back out of the transaction, depending on the terms of the contract.
Test results: What do you expect and when do you act?
A home inspection is an important step to understanding the true state of your potential home. You may not attend the entire test, but I would suggest that at least some of them exist to ask questions and observe the process.
After the inspection you will receive a detailed report that outlines the issues found. This report could be a powerful negotiation tool. If an important issue is discovered, you can:
Repair Request: Ask the seller to deal with certain repairs before closing. Credit negotiations: Ask for credit at closing to cover the costs of future repairs. Adjust the purchase price: Negotiate a lower purchase price, taking into account the repairs you need. Walk away: If the issues are plentiful or the seller doesn’t want to negotiate, you may have the option to terminate the contract.
Some common “red flags” in home inspections that can indicate serious problems include serious structural damage, major roof problems, extensive mold, or outdated electrical systems.
Beyond a typical home inspection, we may consider professional inspections for concerns such as:
Radon Test: Check for the presence of this colorless, odorless radioactive gas. Pest Testing: Identify termites or other destructive pest invasions. Sewer inspection: Check for blockage or damage to the sewer system.
Why are these ratings important to home buyers?
You may wonder if these steps are really necessary, especially given the costs involved. For example, skipping home inspections can expose you to serious financial risks for your line.
Sellers need to provide disclosure, but these are often not enough to reveal all potential issues. The test provides objective and professional evaluations, providing peace of mind and protecting your investment.
Similarities between evaluation and testing
Despite their different purposes, home assessments and inspections share a common basis.
Licensed Professionals: Both the appraiser and inspector are licensed professionals with specialized training. Costs paid by the buyer: The buyer usually covers both the valuation and inspection costs. Escrow Timing: After the offer is accepted, both processes usually occur during the escrow period. Negotiation Opportunities: Results from both assessments and inspections can provide leverage for negotiations with sellers.
Understanding the distinction between assessment and inspection is more than just chopping boxes in the home-being process. It empowers you with the knowledge to make confident and informed decisions. These ratings are your allies and provide clarity and protection as you get closer to owning your dream home. If you want to know more about the Home Viewin process, this Redfin article is for you. Gain the confidence to navigate the real estate market like a professional with expert insights, key tips, and Redfin’s Home Bee Guide.
