Appraisal

An appraisal is a professional estimate of what a property is worth, usually required by a lender before issuing a loan. It’s based on recent sales of similar properties (comps), plus market conditions and the home’s features and condition. If the appraisal comes in lower than the contract price, the buyer might have to renegotiate or bring more cash to close. For investors, appraisals help validate that the property isn’t overvalued and that the deal makes financial sense. It’s a critical part of due diligence, especially for financed purchases.