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, refers to parcels of land and any associated structures which are the property of a person. For a structure (also called an Land i ...

in the opinion of a qualified appraiser or valuer. It is usually a pre-qualification & risk-based pricing factor related to the issuance of

mortgage loan A mortgage loan or simply mortgage (), in civil law (legal system), civil law jurisdictions 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 t ...

s by a

financial institution A financial institution, sometimes called a banking institution, is a business entity that provides service as an intermediary for different types of financial monetary transactions. Broadly speaking, there are three major types of financial ins ...

Overview

When obtaining a

mortgage A mortgage loan or simply mortgage (), in civil law (legal system), civil law jurisdictions 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 t ...

, 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 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 The states and territories are the national subdivisions and second level of government of Australia. The states are partially sovereign, administrative divisions that are self-governing polities, having ceded some sovereign rights to the f ...

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 (whose rate is expressed as a percentage or per mille, also called ''millage'') 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 Wealth t ...

notices. A low appraised value will affect a buyer's ability to purchase property, because the loan amount would seem too high with respect to its 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