Appraisals are an
Important Part of Your Home Buying Transaction
A real estate appraisal
helps to establish a property's market value–the likely sales price it
would bring if offered in an open and competitive real estate market.
Your lender will require
an appraisal when you ask to use a home or other real estate as security
for a loan, because it wants to make sure that the property will sell
for at least the amount of money it is lending.
Don't confuse a
comparative market analysis, or CMA, with an appraisal. Real estate
agents use CMAs to help home sellers determine a realistic asking price.
Experienced agents often come very close to an appraisal price with
their CMAS, but an appraiser's report is much more detailed--and is the
only valuation report a bank will consider when deciding whether or not
to lend the money.