Before approving your mortgage application the lender may require a professional appraisal of the property you want to buy.
This is to ensure that the selling price agrees with the current market value for such homes. The price charged by the appraiser depends on the complexity of the appraisal and the time available to complete it. Appraisers use a number of techniques to establish the value of a property. Some look at comparable homes sold in the past six months, adjusting the price to reflect differences between these homes and the property being appraised.
If several similar homes have recently sold, the appraiser's work is fairly simple. If your home is situated in a rural area, or in a neighbourhood where there is mixed development the appraiser's task is more complex.
Usually the appraised value is very close to the sale price. If the appraisal is lower, the listing REALTOR® may have to make a case for the lowering the price to the seller.