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Home Appraisal

What is the purpose of a home appraisal?

A home appraisal is generally required by the lender in order to establish that the value of the home will be sufficient collateral for the amount of the loan. The appraisal fee is generally paid by the buyer, sometimes required at the time of the loan application but typically paid at the loan closing. home appraisal

A home appraisal is done by an independent appraiser who will generally visit your home and inspect the interior and exterior. However, the appraiser is not performing the same service as a home inspection and many appraisals are only drive-by appraisals. Generally, home improvements or the cleanliness of the interior will not add to or diminish the appraisal value. The appraiser considers many other factors, beyond the inspection, to establish the fair market value, such as comparable values, historic sales and market demand for that area.

Market values fluctuate over time and also vary from neighborhood to neighborhood, causing appraisals to become outdated. Most lenders will require a new appraisal if any refinancing is done, and tax assessors generally re-assess property annually. The value established by your bank loan appraisal will not change the assessment set for property taxes as county tax assessors do their own property evaluations.

In either case, the home buyer should monitor the appraisals for fair treatment in relation to similar houses in the surrounding area and in view of the standards set for appraisers by state licensing boards. For tax purposes, there is often a protest deadline. In the case of a loan, the buyer should be comfortable with the appraisal before committing to a firm offer and before the loan closes. Any concerns or complaints should be brought to the attention of the appraiser, the lender or the state regulatory board. Although the appraisal primarily protects the lender, it can also benefit the buyer or home owner by:

  • providing assurances that the home is not over-valued
  • justifying the amount of the loan
  • qualifying you for certain terms
  • evaluating equity to remove Private Mortgage Insurance (PMI)
  • protecting against negative home equity
  • aiding tax and estate planning
  • helping determine insurance valuations
  • Determining the feasibility of home improvements, refinancing or additional financing


  • I like that you said that market values change over time and neighboorhood influences a lot on the value as well. My dad told me that he wants to know how much his condo is worth. I’m going to let him know that market values changes and he needs to check with a professional about it.

  • It’s good that you point out that getting a home appraisal can help make sure the home you are buying isn’t overvalued. I want to buy my first home soon, so I’m considering using a home appraisal service. I’m going to look for a good provider of home appraisal services in my area to hire.

  • It’s interesting that you mention that you need to get your house professionally appraised if you want to refinance it. My wife and I would like to refinance our home in the near future, so I’m considering hiring a real estate appraisal service. I’m going to see if there’s a reputable provider of real estate appraisal services in the area that we can hire.

  • It’s valuable that you point out that a real estate appraisal can be useful when you want to buy a home. My wife and I are thinking about buying our first house together soon, so it sounds like we should look for a good real estate appraisal service to use. I’m going to look for a reputable provider of home appraisal services in our area that we can use.

  • A home appraisal is an assessment of a property’s value in the current market. It is usually performed by a professional appraiser and is used to determine the market value of the home for sale, refinance, mortgage, or home equity purposes. The appraisal is also used to make sure that the property meets certain requirements, such as zoning and safety regulations.

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