Appraisals vs. Inspections: What’s the Difference in Real Estate?

If you’re diving into the world of real estate—whether buying your first home or selling a beloved property—you’ll likely hear the terms “appraisal” and “inspection” tossed around. While they sound similar, they serve very different purposes in the home buying process. Let’s break down what each one really means and why they matter.

What is an Appraisal?

An appraisal is like a report card for your home’s value. A licensed appraiser visits the property and evaluates it based on size, condition, location, and recent sales of similar homes nearby. The goal? To give the lender an unbiased estimate of what the property is worth. This helps ensure the bank isn’t lending more money than the home is actually worth.

• Who orders it? Usually the lender.
• Who pays? Typically the buyer, as part of closing costs.
• What’s checked? Mainly value-related aspects: square footage, upgrades, comparable sales.

What is a Home Inspection?

Think of a home inspection as a health check-up for the property. A certified inspector examines the home’s structure, systems, and safety features—everything from the roof to the foundation, plumbing, electrical, heating, and more. The inspector’s job is to spot any issues or repairs that might be needed, giving buyers a clearer picture of what they’re getting into.

• Who orders it? The buyer, usually after an offer is accepted.
• Who pays? The buyer.
• What’s checked? Condition and safety: roof, HVAC, foundation, appliances, and more.

Key Differences at a Glance

• Purpose: Appraisals protect the lender; inspections protect the buyer.
• Focus: Appraisals are about value; inspections are about condition.
• Outcome: Appraisals can affect your loan approval; inspections can affect your willingness to buy.

Why Both Matter

Imagine falling in love with a house, only to find out it’s overpriced or hiding costly repairs. Appraisals and inspections together help you avoid surprises—financial or otherwise. They’re like your real estate safety nets, ensuring you make a sound investment.

Whether you’re buying or selling, understanding these two steps puts you in control. Still have questions? Reach out—your next move could be your best one yet!