What is a home appraisal?
A home appraisal is an independent valuation of a home to determine its market value.
A home appraisal is generally organized by the lender and is usually paid for by the buyer. All loans require an independent appraisal. The reason the lender requires an appraisal is that you may think a home is worth more money than it really is. You make an offer based on that assumption but if the appraisal leads the lender to believe the home is overvalued, the lender may feel this is a risk and may not grant you a mortgage. Basically the lenders want to protect themselves by ensuring the property is worth its market value. The appraisal helps assure the buyer does not end up having negative equity on the home.