Buying or selling a home comes with a lot of moving parts, and two of the most commonly misunderstood pieces of the puzzle are appraisals and surveys. While they may sound similar, they serve very different purposes in a real estate transaction. Let’s break it down.

What Is an Appraisal?

An appraisal is an unbiased estimate of a property’s value, conducted by a licensed appraiser.

Why it matters: Lenders require an appraisal before approving a mortgage to protect their investment. Since the lender is providing the funds for the purchase, they want to be sure the property (the asset securing the loan) is truly worth what they’re paying for.

When it happens: After the contract is signed, usually within the first couple of weeks of the closing process.

For sellers: A low appraisal could affect the agreed-upon sale price and may lead to renegotiation.

For buyers: While the main purpose is to protect the lender, it also indirectly protects you from significantly overpaying for a property.

What Is a Survey?

A survey is a detailed map of the property’s boundaries, easements, and improvements (like fences, driveways, or sheds).

• Why it matters: It ensures the property lines are correct and identifies if anything is encroaching on a neighbor’s land.

• When it happens: Often during the contract period, depending on local laws and lender requirements.

• For sellers: It helps clear up boundary issues before closing.

• For buyers: It confirms exactly what land you’re purchasing.

A Real-Life Example

Imagine buying a home with what looks like a spacious backyard, only to discover after the survey that part of the fence — and even a shed — actually sits on the neighbor’s property line. Situations like this happen more often than people realize. Without the survey, a buyer could unknowingly purchase a property with a boundary dispute.

But don’t worry — issues like this can usually be resolved. Depending on the situation, the parties may:

• Adjust the fence line to match the correct boundary.

• Negotiate with the neighbor to create a boundary agreement.

• Request the seller relocate or remove the structure before closing.

• Update the title records to reflect an easement or formal agreement.

Because the survey identifies the problem early, these solutions can be worked out before closing so the buyer moves in with peace of mind.

Why Both Are Important

• Appraisals protect the financial side of the transaction.

• Surveys protect the legal and boundary side of the transaction.
  Together, they give both buyers and sellers peace of mind and help prevent costly issues down the road.

Key Takeaway

If you’re buying or selling, be prepared: an appraisal tells you what your home is worth in today’s market, and a survey tells you exactly what land is included in the sale. Both play an important role in making sure your deal closes smoothly.

 Pro Tip: Always review the appraisal and survey results with your real estate agent so you fully understand their impact before closing.