The Difference Between Appraisals and Inspections

Understanding the difference between appraisals and
inspections is important to any 


real estate transaction.





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Recently someone sent in a great question: “What is the difference
between an appraisal and an inspection?” 

It’s common to confuse these two things, but knowing the difference
is actually very important to any real estate
transaction. 

First, let’s discuss appraisals. The main purpose of an
appraisal is to determine the value of a home. Even though I
myself have a solid understanding of market value and have worked
with several hundreds of homes, my opinion, or any agent’s opinion,
simply doesn’t mean as much as the home value determined by an
appraiser. 

The lender is the person to whom this appraisal will really matter.
Except in the case of cash buyers, the lender is the one
supplementing this large sum of money to the buyer for the home
purchase.

 Also, since they will be using the home as collateral, it is
important for them to have a solid grasp of what the value
is. 

In today’s escalating market, appraisers will look at similar homes
while accounting for things like upgrades. Appraisers are looking
in areas to help them determine home value. This can cause
discrepancies in a forward-moving market like the one we’re in
today. 

Sometimes these discrepancies will manifest in the form of an
appraisal gap. 

Moving on, there’s also the matter of the home inspection.
Inspections benefit the homebuyer in a number of ways. An
inspection will not only alert them to issues within the home, but
will also give them a good idea of what home maintenance will be
like in the future. 

Overall, each one of these processes are integral to getting to the
closing table from either side of the transaction.

“

These processes are integral to getting to the closing table.

”
If you have any other questions or would like more
information, feel free to give me a call or send me an email. I
look forward to hearing from you soon.