| During the home buying process, you'll
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| | appraisal is how the lender protects its
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| hear the term "appraisal" mentioned at
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| | own financial interests.
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| some point.
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| | Generally, you'll have little control
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| Chances are, you already have a general
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| | over the appraisal process and won't even
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| idea what this term means. But when it
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| | be present for it. Chances are, your
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| comes to mortgages and home buying, you
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| | lender will arrange the appraisal, and
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| need to know exactly what an appraisal
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| | the house will either appraise at the
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| involves and how it affects you.
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| | asking price or not. Hopefully the
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| First, a definition:
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| | former.
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| Appraisal -- A professional appraiser's
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| | If the home appraises for less than the
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| estimate of the market value of a
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| | asking price, you have two options. You
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| property. Appraisals take into account
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| | can come up with the difference, or the
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| the local market conditions and the
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| | seller can reduce the asking price to
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| characteristics of a property. They are
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| | match the appraisal.
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| required by most lenders.
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| | Also keep in mind that an appraisal is
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| In other words, the appraisal is the
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| | not a home inspection. A home inspection
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| lender's way of determining a realistic
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| | is something you should obtain to protect
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| market value of your future home. The
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| | your investment. An appraisal is the
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| lender uses the appraisal to ensure that
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| | appraiser's opinion about the value of
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| the home is actually worth the price
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| | your prospective home. But that's it.
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| you've agreed to pay.
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| | Appraisers will not test the
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| In the unfortunate event that you can't
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| | functionality of appliances, inspect the
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| pay your mortgage, the bank will
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| | roof, or perform other tasks a home
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| foreclose on the home and resell it. Not
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| | inspector would do.
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| a nice thought -- but it's reality. The
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| | * Copyright 2006, Brandon Cornett.
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