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Step 6: Inspections

Step 5: Handling Apraisals

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 the lender 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 CMA’s, 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.