Appraisal
What Is an Appraisal?
Appraisal is a professional evaluation of a property’s market value conducted by a licensed appraiser.
It is commonly required in mortgage transactions to ensure the property value supports the loan amount.
Appraisals protect lenders from lending more than a property is worth.
Why It Matters
Appraisal:
- Confirms property value
- Influences loan approval
- Protects both borrower and lender
If the appraised value is lower than the purchase price, financing may need adjustment.
Appraisals are standard in mortgage and refinancing transactions.
How Appraisal Works
Appraisal involves a licensed professional inspecting the property and comparing it to recent comparable sales in the area.
The appraiser considers condition, size, location, and market trends.
The final report determines the estimated fair market value.
Appraisal vs. Home Inspection
Appraisal → Determines value
Home Inspection → Evaluates condition
Each serves a different purpose in a real estate transaction.
FAQs About Appraisals
Who pays for the appraisal?
The borrower typically covers the appraisal fee.
Can an appraisal be disputed?
Borrowers may request reconsideration if factual errors exist.
Is appraisal required for refinancing?
Many refinances require appraisal, though some programs waive it.
Related Terms
