DictionaryThe buying process

Home appraisal: what it means

An appraisal is a written document that gives a professional appraiser's opinion of how much a property is worth. The lender orders it before approving the mortgage, because the home is the loan's collateral and the lender does not want to lend more than it is worth.

In Spanish it is

Avalúo

Also written as: appraisal · appraised value

A man tours his new home with a housing specialist.

Verified on October 16, 2026

1 official source

See the whole dictionary

The full explanation

If the appraisal comes in below the price you agreed, the bank bases the loan on the lower value and you will have to cover the difference, renegotiate the price or walk away if your contract allows it. An appraisal is not an inspection: it measures value, not the home's condition.

An example

Paula offered above the list price and the appraisal came in lower. Her lender only finances up to the appraised value, so she negotiates with the seller before moving on.

You will see it in…

The Loan Estimate, section B (“Appraisal Fee”)
The appraisal contingency in your purchase contract
The lender's letter with the appraised value

Words that go with it

You will rarely see this word alone. These are the ones that show up with it on the same papers.

More guides that use “home appraisal”

Still confused by a paper?

A HUD-approved housing counselor can walk you through it. Agencies usually charge little or nothing, many work in Spanish, and they do not sell you anything.

What a housing counselor does See free help

Official sources

We sum up what these official sources say, in plain words. We add no rules they do not state; when a rule changes, the definition and its date change.

1. CFPB · Mortgages key terms: home appraisal (external site) · in English · Verified on October 16, 2026