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Home Appraisal
Definition
A professional assessment of a property's market value by a licensed appraiser.
Explanation
Lenders require appraisals to verify the home is worth the purchase price. The appraiser inspects the property and compares to similar recent sales (comps). Cost: $300-600, paid by buyer.
If appraisal is below the offer price, you can negotiate down, make up the difference, dispute, or walk away. Appraisal gaps are common in competitive markets.
Example
Offer $410,000, appraisal = $395,000. Lender lends on $395,000. You need to negotiate price down or bring $15,000 extra to closing.