What Is Appraised Value?
It's an objective opinion of value, but it's not an exact
science so appraisals may differ.
For buying and selling purposes, appraisals are usually
based on market value—what the property could probably be sold for. Other types
of value include insurance value, replacement value, and assessed value for
property tax purposes.
Appraised value is not a constant number. Changes in market
conditions can dramatically alter appraised value.
Appraised value doesn't consider special considerations,
like the need to sell rapidly.
Lenders usually use either the appraised value or the sale
price, whichever is less, to determine the amount of the mortgage they will
offer.
Used with permission from Kim Daugherty, Real Estate
Checklists and Systems (http://www.realestatechecklists.com).
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