Appraisal
A licensed appraiser's opinion of the home's market value. Lenders order it to make sure the home is worth at least what they're lending on. Buyer usually pays for it.
Your Room opens on this part of the sale, with the offer and everything before it already ticked.
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See how it worksWhere this comes up in a sale, and what follows
- Review offers and negotiate (comes before)
Part 1 of 4
Why a seller cares
The buyer's lender orders it, and if it comes in under the contract price the loan may not cover the gap. A low appraisal is the most common surprise in a financed sale, and it has known ways forward.
Part 2 of 4
A simple example
Contract price $310,000, appraisal $300,000. The lender will lend against $300,000. The buyer brings the difference, the price is reduced, the two meet in the middle, or the deal ends under the appraisal contingency.
| What the appraisal says | What usually follows |
|---|---|
| $310,000 or more | Nothing; the loan proceeds at the contract price |
| $300,000, and the buyer has cash | They bring the $10,000 or the two sides split it |
| $300,000, and the buyer has no cash | A price cut to $300,000, or the buyer walks under their contingency |
The appraisal sets the ceiling on the loan, not on the price. The gap is what the two sides negotiate.
Part 3 of 4
What people get wrong
That the appraiser decides what your home is worth. They decide what the lender will lend on; a buyer can pay more.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · read against CFPB: what is a home appraisal? · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines appraisal in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.