An appraised value (United States) or mortgage valuation (Australia) pertains to the assessed value of

real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or aff ...

in the opinion of a qualified appraiser or valuer. It is usually used as a

pre-qualification In general, to pre-qualify is about passing or meeting an initial criteria or requirements before getting other opportunities opened up to such a person. Pre-qualification is a process whereby a loan officer takes information from a borrower and ...

& risk-based pricing factor related to the issuance of

mortgage loan A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...

s by a

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial inst ...

Overview

When obtaining a

mortgage A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...

, the funding lender relies on the standardized valuation methods of an appraiser to assess a monetary value for the specific piece of real property on which a loan will be secured (e.g. a residence). The lender will then justify the loan amount (and other risk-based pricing) factors as a percentage of the appraised value of the property.Real Estate Appraisals
Licensed and Certified Appraisers Appraised values can also be made after a property sale. For example, home owners wishing to gain access to their increased

equity Equity may refer to: Finance, accounting and ownership *Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the diff ...

in their home may obtain a mortgage valuation to prove its value has risen and thus justify increasing the amount of their mortgage. Also, the various

states of Australia State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...

each have a Valuer-General's Department, which regularly assess land values in all municipalities and shires for the purpose of issuing

property tax A property tax or millage rate is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or net wealth, taxes on the change of ownership of property through inher ...

notices. A low appraised value will affect a buyer's ability to purchase a property. This is because the loan amount would seem too high with respect to the value. Unless the buyer can come up with the difference, the buyer will unlikely be able to qualify for the loan.

Appraisal fraud

Fraud in appraisal happens during both upturn and downturn markets. When a homeowner is looking to refinance their home, the appraiser is sometimes under pressure to overvalue the home to make the refinancing more attractive."Appraisal fraud"
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References

Mortgage Mortgage industry of Australia

Overview

Appraisal fraud

See also

References