Bruno Simpson Last Updated Jul 09, 2019 (0) comment ,


What is an Appraisal?

An appraisal is an educated and well-formed opinion of a licensed appraiser on the value of a home or property.

Any property may have an “assessed” value. However, it’s important to note that an assessment, or assessed value, differs from an appraisal. An assessment may be completed on a home or property yearly, every two-years, or other variable with consistency. Government employees are responsible for assessing the value of a home or property strictly for tax purposes. They only take into consideration things like location, lot size or home size and dimensions. Rarely do assessments positively consider alterations or improvements to a property.


Licensed professionals (appraisers) complete appraisals, usually at the behest of a lender, and generally only when a property is in the buying/selling process. Sellers, and their representatives do sometimes request an appraisal before setting the asking price of a home or property. Even when this is the case, lenders often like to have their own appraisals because they have a vested interest in the value of a property and its ability to hold that value over the life of a mortgage loan.

An appraiser will generally assess things like current market value and recent home sales of similar homes or properties from the same general geo-location or neighborhood (comparable home sales.) The appraiser will consider the condition of the property, any recent additions or upgrades, damages, or things that need repair and will then determine how much weight they carry in the property’s value.


A lender will usually only approve a loan amount for their appraised value of a home, or less. If an appraisal comes back and the value of the home that a borrower is trying to buy is lower than the asking price, then the borrower may use this as bargaining power. If a seller refuses to lower the price of a home, but the buyer still wants the house, a lender may ask for a larger down payment to compensate.

Even though an appraisal is an opinion of the value of a home or property, it is a highly educated and valued opinion. Appraisal reports form the basis for things like the settling of estates or divorces, mortgage loans, taxation, refinancing options, etc.

Pre-Qualify For The Lowest Interest Rate

Get custom home loan advice from a mortgage expert today.

Get Started Here
FHA Loan Checklist Credit Check