Appraisal Report
Definition and meaning of Appraisal Report in real estate.
An appraisal report is a comprehensive written document detailing a professional appraiser's evaluation and opinion of a property's market value.
In more detail
This report includes a detailed analysis of the property, local market trends, and comparisons with recently sold homes in the area, known as comparables. It serves as the primary tool for lenders to verify that the property collateral, which is the asset securing the loan, is sufficient to secure the mortgage.
The document outlines the appraiser's methodology, physical observations, and property details like square footage and structural condition. Buyers receive a copy of this report and can use it to renegotiate the purchase price if the valuation falls below the agreed contract price.
Key facts
| Category | Buying & Selling |
|---|---|
| Primary user | Mortgage lender and buyer |
| Key components | Comparable sales, property description, and valuation method |
| Underwriting role | Establishes maximum loan-to-value ratio |
The lender provided the buyers with a copy of the appraisal report, which confirmed that the house was valued at the contracted sales price based on recently sold comparable properties.
Frequently asked questions
How long does it take to get an appraisal report?
The entire process, from ordering the appraisal to receiving the completed report, typically takes one to two weeks.
What can a seller do if the appraisal report value is too low?
The seller can request a reconsideration of value by providing alternative comparables, or renegotiate the sale price with the buyer.
Who owns the appraisal report?
Even though the buyer pays for it, the lender legally owns the report because they ordered it to evaluate their loan risk.