An appraisal determines the fair market value for a home. A professional appraisal is done by a licensed third-party appraiser who assesses the interior and exterior of the property, researches similar homes in the area and gives a final report.

Do appraisals usually come in at asking price?

According to Fannie Mae, appraisals come in below contract only about 8% of the time. Most appraisals will come in at the right asking price, but when they do come in low, they are often renegotiated.

How is an appraisal calculated?

A qualified appraiser creates a report based on a visual inspection, using recent sales of similar properties, current market trends, and aspects of the home (e.g., amenities, floor plan, square footage) to determine the property's appraisal value.