Appraisal Report is an re-evaluated report of the property that is produced by a certified market evaluator professional. This report is required by all lenders but the cost of producing of this report is paid by the borrower of the mortgage. This report is typically based on the market value specified by the lenders criteria of evaluating that report because lenders is putting his money on that investment so the criteria of selecting its market value is based on lenders terms and conditions and there could be different standpoint of lender in evaluating that property based on that that report its lenders selection or choice weather to finance that property or not if the lender feels this property is not worth for the lender to put in money he can choose to refuse the financing options, but different lender might have different criteria in choosing that property for finance the only different will be that the Appraisal value report have to represented to another lender.
Definition of appraisal value. How lenders look at it at the time of refinancing your home. You can cash your appraisal value and difference between market value and appraisal value. What factors can affect the value of your property.
Based on the Appraisal report the certified evaluator gives the market value of the property of that property. In most cases lender makes its decision of lending. Lender at that point decides what is the property is worth and what price is borrower is paying and asking for the mortgage. Now remember there is and has been always the difference in market value and price of the property or land.
Market Value is the value paid by any person in open market and is worth to be sold in the market in normal market conditions. The price is something that is paid on the basis of individuals choice, need requirements or wants of that property in some cases that price paid may be lower than the market value due to sellers circumstances and most cases the price paid is over the market value because of the buyers need or in other words it fulfills the requirements of the buyer and he is willing to pay more for that property or land.
Here is an example
Seller is selling the house for $500000 that what is property market value is, because he is in big loss and is at verge of bankruptcy he will accept $450,000 for his property in order to sell fast. In this case the buyer has paid fewer prices than the property is worth in most cases lender will finance this property.
In another scenario a seller is selling a water front property that is worth $700,000 but he is asking $780,000 asking 80,000 more that the market value. Now a buyer has agreed to pay that amount because the property is very suitable to the buyer it is water front, close to school and close to his work and he thinks it is worth price for him considering all other factors. In this case the financer will more likely refuse to put his money or may put a condition of borrower to put more money down to save his investment.
This is a clear example of Appraisal value.