Definition
A licensed appraiser's professional estimate of a property's market value, usually ordered by the lender before approving a mortgage or refinance. The loan is sized against the appraised value, not the offer price.
Why it matters
A low appraisal can reshape a purchase overnight: the lender will not cover the gap between price and value. Buyers either bring extra cash, renegotiate, or walk away, which is why appraisal contingencies exist.
Example
A buyer offers $310,000 and the appraisal comes back at $295,000. The lender bases the loan on $295,000, leaving a $15,000 gap. The buyer negotiates the price down to $300,000 and covers $5,000 in cash, keeping the deal alive.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.