Purpose
The appraisal provides an independent opinion of value and evaluates property characteristics relevant to the loan.
Home appraisal
The appraisal protects the loan decision, not the purchase contract.
Mortgage lenders use an appraisal to evaluate the property and support the value used in underwriting. The appraised value can affect loan-to-value and financing structure.
Comparable sales
Appraisers commonly analyze recent comparable properties while adjusting for differences.
Purchase price versus value
A contract price does not guarantee the property will appraise at that amount.
Low appraisal
Options can include renegotiation, additional cash, appraisal review, financing changes, or contract remedies depending on the transaction.
VA and FHA
Government-backed loan programs can have additional appraisal and property requirements.
Not an inspection
An appraisal does not replace a full home inspection or other specialized property evaluations.