Real Estate Inspections vs. Appraisals: What’s the Difference and Why It Matters
The main difference between real estate inspections and appraisals is that inspections focus on a property’s physical condition, while appraisals determine its market value. Both are critical in property transactions, but they serve very different purposes and impact buyers, sellers, and lenders in unique ways. Introduction: Clearing Up the Confusion If you’ve ever bought or sold a home, you’ve probably heard the terms “inspection” and “appraisal.” Many people mistakenly believe they’re the same thing. After all, both involve professionals evaluating a property. But the truth is, real estate inspections and appraisals answer very different questions. An inspection asks: What shape is the property in? Are there hidden issues that could cause problems or extra costs? An appraisal asks: What is the property worth on the current market, based on location, size, condition, and comparable sales? Understanding the difference can help you avoid costly mistakes, negotiate better deals, and e...