Once you make your offer, your lender will order an appraisal to get a professional opinion on the value of the home – versus how you and the seller value the home. They are making a big investment in the home and need to know through a formal appraisal process that it’s worth what you’re offering to pay, or what they’ll lend you.
Appraisals can protect you and the bank:
- Your lender doesn’t want to lend $150,000 on a home that’s only worth $100,000
- You don’t want to pay $150,000 for a home that’s worth much less
In your written offer, it’s recommended that you make the home purchase contingent on the appraisal.
The appraisal is a necessary step in getting your financing secured and your lender will want the appraised value to meet the value of the loan.