What’s The Difference Between A Home Evaluation & An Appraisal

In short, a home evaluation is a current market assessment prepared by a real estate professional for a buyer or a seller, and an appraisal is conducted by a licensed appraiser on behalf of a lender or finance company. Each side has a slightly differing approach to establishing ‘fair market value,’ but both systems need to work in tandem for the market to function freely and safely.

An appraisal only considers hard data, that is, actual recent sales of what they believe to be directly comparable properties. A home evaluation by an experienced agent takes this a step further and also looks at market trends, historical data, marketability, and true supply and demand in the same way that a portfolio manager looks at stocks and companies to invest in.

As professional real estate advisors, we look to keep our clients ahead of the curve to ensure they have the most effective purchase or sale possible. Having the right information is key to making an informed investment decision. We never encourage our clients to overspend on a purchase unnecessarily, especially if mortgage financing is required, and we do a thorough analysis with them before submitting offers or listing their property for sale.

Appraisals are often on the conservative side to protect the interests of the lender, but we often supply market data and comparables to our clients to provide to their mortgage companies to support their purchases if need be.

Make sure you understand the terms and purpose of each approach before relying on those numbers, and it will surely save you from stumbling into a stressful situation!