What’s an Appraisal?

You’ve heard the word appraisal before, but are you unclear on what it means?

In Real Estate, the appraisal is an assessment of the market value of property, such as homes or commercial real estate.
Most lenders will require an appraisal by a third-party independent appraiser to verify that the house (collateral for the loan) is worth the purchase price. The appraiser’s work forms the basis of valuing, selling, and buying property fairly.

When a house or price of property is being appraised, the appraiser will look at the properties location, condition and features to determine whether the home’s contract price is appropriate.

In the recent seller’s market, some buyers last spring were waiving the appraisal or indicating in the offer to purchase that they (the buyer) would bring additional cash to closing if the property didn’t appraise for the purchase price. That is unusual, but it was also unusual times!

Talk to your lender if this is something you plan to consider. No lender? Hit me up, I can provide you some names!