What Is The Purpose Of A House Appraisal?

The purpose of a house appraisal is to provide an independent opinion of value for a stated purpose and date. It can inform lending, pricing and other property decisions.

Securing the Mortgage Lender

For a lender, the appraisal supplies information about property offered as collateral. Ask the lender which valuation process is required; the report alone does not establish loan approval or terms.

Protecting Buyers and Sellers

An appraisal can help buyers and sellers evaluate a price. A seller may request a pre-listing report, while a buyer’s lender may have separate ordering requirements. If the value differs from the contract price, discuss the implications with the professionals handling the transaction.

Refinancing and Equity

When refinancing or seeking another property-related loan, ask the lender whether a valuation is needed and how it will be used. An appraisal does not by itself determine eligibility or mortgage-insurance cancellation.

Appraisal vs. Home Inspection

It is common to confuse an appraisal with a home inspection, but they serve fundamentally different purposes in a real estate transaction. While an appraiser looks at value, an inspector looks at the condition and function of the home’s systems.