Appraised value
The value the appraiser assigns to the home in their report. If it's less than the sale price, the lender will only lend against the lower number.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
The appraised value is the number the lender uses for everything: the loan amount, the LTV, whether PMI applies. It is one opinion on one day, and in a financed sale it carries more weight than the price.
Part 2 of 4
A simple example
Your home appraises at $305,000 on a $300,000 contract. The lender lends against $300,000, the lower of the two, and the extra $5,000 changes nothing.
| Appraised value against the price | What the lender does |
|---|---|
| Above the price | Lends against the price; the extra is the buyer's equity |
| Equal to the price | Lends as planned |
| Below the price | Lends against the appraisal; the difference is the gap |
The lender always uses the lower of price and appraised value.
Part 3 of 4
What people get wrong
That an appraisal above the price raises what you get. The price is the contract; the appraisal only limits the loan.
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 · drawn from the reference glossary · how we research and check what we publish
One piece of your sale. Here is where all the pieces live.
In your room, this word explains itself where it appears.
Keighbor keeps your whole home sale in one place and defines every term like this one right where you meet it, in the step you're on. Free to set up, with or without an agent.