An appraisal on your home is an unbiased estimate of how much a home is worth. When buying a home, the lender requires an appraisal by a third party (the appraiser) to make sure the loan amount requested is accurate.
During a home sale, the lender sends out an appraiser to give their professional opinion on the property value. Since the home serves as collateral for the mortgage, the home appraisal helps the lender decide if the property is worth the amount of the loan the potential buyer is seeking. If the home’s appraised value is below what the buyer has offered, the lender may request the buyer pay the difference in cost.