What Is The Difference Between An Appraisal and An Inspection?

I have been asked this question many times. It's a good question, and one that I am happy to answer for you! What is the difference between an appraisal and inspection? Well, there are three things: location, scope of work, and value of the property being inspected. An appraisal will be looking at the value of a home or commercial building as it stands today (or on any given day), while an inspection would assess its current condition.

Appraisal: An appraisal is written to assess the current market value of a home or commercial building at its location. This will include reviewing sales history for similar homes in the area, as well as consideration of any improvements that have been made since they were purchased. While an inspector might focus on what repairs are needed to make sure it's in good shape, the appraisal will look at what it would cost to buy that same house today. So when you are looking for a home or commercial building, an appraisal is all about whether you should invest in its location based on current market values and conditions.

Inspection: An inspection might be done to determine if repairs need to occur before a home or commercial building is purchased. In this case, an inspector will review the condition of a property in order to provide you with information about the current condition of the property and the major systems of the property. The goal here is not necessarily to assess its value in terms of selling price, but rather what is the current condition. So when you are in the market for a home or commercial building, an inspection is all about whether it's worth investing your money to fix it up before moving in.

Value: So, why would you need an appraisal or inspection? Well, that depends on what your goal is! If you are looking to sell the property at the end of its life (the lifespan of a home), then you will want it appraised. On the other hand, if there are some repairs needed before moving in and occupying the home, then you might want an inspection. When it comes to business property purchases, the decision is usually based on what kind of value they will add to your company's bottom line.

That being said, both are important and can be used together when needed for determining a property's worth at any given point in time. That being said, an appraisal should not replace other forms of research that would assess the marketability of your home or commercial building. This could include researching comparable properties to find out what they have sold for in the past, in addition to doing an inspection before purchasing.

If you are thinking about buying or selling a property and want more information on when would be best for what purpose (or even how both could work together), give me a call! I'd love to tell you more about it!