What Is Appraised Value?
Appraised value is a licensed appraiser's professional opinion of what a property is worth, based on comparable sales, condition, and market data — used by lenders to confirm a loan amount is justified.
Appraised Value in plain English
Appraised value is the number in the appraisal report - the appraiser's opinion of the home's market value on a specific date, based mainly on comparable recent sales.
Lenders base the loan on the lower of the appraised value and the purchase price, so it directly affects your loan-to-value ratio and how much cash you need.
Common mistakes
- Confusing appraised value with assessed value on the tax bill.
- Assuming an online estimate predicts the appraisal.
- Expecting improvements to add their full cost to the appraised value.
Appraised Value vs. Market Value vs. Assessed Value
A licensed appraiser's formal opinion of value, ordered by a lender to confirm a loan amount is justified.
What a property would likely sell for right now, given current buyer demand — an estimate, not a formal figure.
A local government's valuation used to calculate property taxes — often lower than market value and updated on its own schedule.
Compare and common questions
Appraised Value: frequently asked questions
Is appraised value the same as market value?
Not exactly the same. Appraised value is one professional's opinion of market value on a date; the market value is what a buyer actually pays in an open sale.
What happens if the appraised value is higher than the price?
Nothing changes on the loan - the lender still uses the lower purchase price - but you start with more equity on paper.
Does appraised value affect my mortgage insurance?
Yes. Loan-to-value is measured against the lower of price and appraised value, and it decides whether mortgage insurance is required.
Related Terms
Where it fits
- Buying a home, Appraisal: before this, Appraisal; next, Appraisal Gap.
More Buying Terms
Recommended next step
See what happens when the appraised value is below the price.
Appraisal gap →Sources and review
- Why did I receive different valuations during the mortgage loan application process?, Consumer Financial Protection Bureau. Supports: Appraised values come from licensed appraisers comparing the home with local sales.
Where this applies: United States. Appraisals for lending follow lender and federal requirements; appraisers are state-licensed.
Last reviewed: · Updated:
Examples use illustrative figures; rules of thumb are labelled as such. Rates, limits and program rules change - confirm current figures with your lender or a qualified professional.
This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
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