Property Appraisal Costs
The lender also gets the property appraised before granting the loan to the borrower. The lender wants to know that the property is worth the amount of loan that the borrower is buying it for or more than that. The lender will not want to lend more money than what the property is actually worth because that represents a potential risk and lost to the borrower in case a situation of foreclosure arises in the future. If the property is valued less than the balance on the loan, he will not be able to recover is loan from selling of the property.
The appraisal of the property is done by a third-party appraiser who prepares a written report that contains an estimate or opinion of the fair market value of the property being purchased. In many circumstances the reliability of the appraisal will also depend upon the competence and integrity of the appraiser.
It is a good idea to choose an appraiser who has knowledge of the local market so that he is able to attach the right price tag to the property based on proper information.