Bank Appraisal vs Real Estate Appraisal: Understanding the Differences

When it comes to buying a home, understanding the difference between bank and real estate appraisals is crucial. These assessments are essential in the Canadian mortgage world and provide valuable insights into a property’s market worth. This article aims to break down the nuances of both types of appraisals, empowering you with knowledge to make informed decisions during your home-buying journey.

Bank appraisals are conducted by independent appraisers hired by lenders for mortgage approval purposes. In contrast, real estate appraisals are conducted by licensed professionals and provide an unbiased estimate of a home’s value in the current market. Both types of assessments consider factors such as the condition of the home and recent sales data. However, bank assessments focus more on protecting lenders’ investments, while real estate assessments provide valuable insights for buyers and sellers during the home buying and selling process.

Key Takeaways

Bank appraisals are conducted by independent appraisers hired by lenders for mortgage approval purposes.
Real estate appraisals are conducted by licensed professionals and provide an unbiased estimate of a home’s value in the current market.
Factors such as the condition of the home and recent sales data play a significant role in both types of assessments.

Understanding Appraisals

When you are buying or selling a property, an appraisal is necessary to determine its market value. The appraisal plays a critical role in obtaining mortgage approval.

What is an Appraisal?

An appraisal is a comprehensive evaluation of a property’s worth conducted by an independent appraiser. The evaluation aims to provide an unbiased value of a home at the time of purchase or refinancing. The purpose behind this practice is to safeguard the loan investment of lenders such as banks and other financial institutions, ensuring that the loan they are providing aligns with the actual market value of the home. This helps them recover sufficient funds from selling it in an unfortunate event like foreclosure should the buyer fail to pay back their mortgage. Typically, buyers shoulder the cost of this essential part of mortgaging, which usually ranges between $350-500.

When is an Appraisal Required?

When you’re in the process of buying a home, you may need to get an appraisal. An appraisal is a critical step in validating that the home’s price aligns with its actual worth. Lenders usually mandate an appraisal, especially when a mortgage is involved in purchasing the house.

In most instances, an appraisal is required for low-ratio purchasers holding uninsured mortgages where their down payment stands at 20% or above. However, there are exceptions to this rule. For instance, if potential buyers are already insured by entities like CMHC and have less than 20% for a down payment, or if down payments outstrip loan amounts, then an appraisal is not required.

If you need an appraisal, you should budget for the appraisal costs, which typically range between $350-500 in Canada. As a prospective homeowner, it’s essential to understand when an appraisal is required to ensure that you’re prepared for the costs associated with it.

Bank Appraisals for Mortgages

When you’re buying a home, getting a bank appraisal is a crucial step. This appraisal provides an unbiased estimate of the property’s value, which is important for both the lender and the buyer. The bank appraisal takes into account the property’s location, size, condition, and recent sales of similar properties in the area. If the appraisal comes in lower than the agreed-upon purchase price, the buyer may need to renegotiate or come up with a larger down payment.

Home Appraisal Process

When you apply for a mortgage loan, your lender will order an evaluation to determine the worth of your home. An independent licensed professional will conduct both interior and exterior inspections, evaluating everything from square footage to the age of the house and even landscaping details. The evaluation aims to validate the home’s worth against the mortgage loan you are seeking.

Factors considered in a bank appraisal

How do appraisers estimate value for a bank appraisal?

When conducting a bank appraisal, appraisers take into account various factors to determine the value of a property. The appraiser evaluates the condition of the home, recent sales in the area, and any unique features or upgrades that may impact its value. In addition, the appraiser considers the square footage, location, interior design, landscaping, and age of the house. All these elements help to establish an accurate estimate for the property’s market value.

To estimate the value of a property for a bank valuation, appraisers use a combination of factors. They consider the condition of the home, recent sales of comparable properties in the area, and market trends. Appraisers also take into account the location, size, and features of the home, as well as any improvements or renovations that have been made. By analyzing all these elements together, appraisers are able to provide an objective assessment of a property’s worth for mortgage lending purposes.

Real Estate Appraisals

When you need to know the value of a property, you can hire an independent, licensed professional to conduct a real estate appraisal. This professional will provide an unbiased estimate of the property’s value.

The Process of Real Estate Appraisals

Real estate appraisals are conducted by licensed professionals who provide an unbiased estimate of a home’s value. The appraiser begins by visiting the property and conducting a thorough inspection of both the interior and exterior. During the inspection, the appraiser takes into account various factors such as square footage, location, age of the house, landscaping, and interior design.

To determine market trends and comparables, the appraiser also considers recent sales in the area. Using this information, the appraiser assesses the value of the property. The final report includes a detailed analysis of the property and the factors that influenced the appraisal. Overall, the appraisal process is an essential step in the home buying and selling process, providing both buyers and sellers with an accurate estimate of a property’s value.

Factors considered in a real estate valuation: Price of a Property & More

When appraising a property, there are several factors that are taken into consideration to determine its market value. These factors include the physical condition, size, location, age, landscaping, and interior design of the property.

In addition to these factors, the appraiser also considers recent sales of comparable properties in the area to accurately assess the property’s value. This helps to determine the fair market value of the property.

Other important considerations include historical property data, supply and demand trends in the real estate market, and any relevant changes or developments in the surrounding neighborhood. These factors can have a significant impact on the value of the property.

However, the price of a property is often the most important factor when determining its value. The appraiser will take into account all of these factors to determine a fair market value for the property.

Differences between Bank Appraisals and Real Estate Appraisals

When it comes to property appraisals, there are two types: bank appraisals and real estate appraisals. Although they may seem similar, there are some key differences between the two. Here are some of the main differences:

Bank appraisals focus on the property’s value from the lender’s perspective, while real estate appraisals provide an unbiased estimate of market value.
The condition of the home is taken into account differently, with bank assessments considering it as a factor for loan protection, while real estate assessments assess it based on overall market appeal.

It is important to understand these differences when seeking an appraisal for your property, as the type of appraisal you choose can affect the outcome and the value assigned to your property.

Condition of the Home

The condition of the home is a crucial factor that affects its appraisal value. Appraisers evaluate the overall state of the property, including its interior and exterior, to determine its worth. They take into account the age of the house, any updates or renovations that have been done, and the general wear and tear.

A well-maintained home with modern amenities is more likely to receive a higher estimation value compared to a poorly maintained property that requires extensive repairs or updates. Regular maintenance and necessary improvements are essential for buyers and sellers to understand the impact of the home’s condition on its appraised value.

It is important to keep in mind that the condition of the home can significantly impact its appraised value. Therefore, it is crucial to keep up with regular maintenance and make necessary improvements before putting it on the market or applying for a mortgage loan.

Comparables

When estimating the value of a property, comparables play a significant role in the process. These are properties that have recently sold or are similar to the subject property in terms of size, location, age, condition, and other relevant features. Both banks and real estate appraisers use comparables to determine the market value of the property being appraised.

Appraisers analyze recent sales of comparable properties to see how much similar homes have sold for and make adjustments based on any differences between them and the subject property. This helps ensure an accurate estimation by providing valuable insights into the current real estate market trends and prices in a specific area. Comparables are a crucial factor in the estimation process and provide a benchmark for determining the value of a property.

Dealing with Low Appraisals

If you receive a low appraisal, you have several options to consider:

Dispute the estimation
Seek a second opinion
Fund the difference yourself

It’s important to carefully evaluate each option and choose the one that best suits your situation.

Disputing the Appraisal

If the appraisal comes in lower than the agreed-upon purchase price, you have options for disputing the estimation. One option is to gather additional evidence to support a higher value. This can include recent sales of similar properties in the area that were not considered during the initial estimation.

Another option is to hire a second appraiser for an independent assessment of the property’s value. This can help provide a more accurate estimation of the property’s value. However, keep in mind that this option can be costly and time-consuming.

If all else fails, you may need to fund the difference between the appraised value and purchase price yourself in order to secure financing from the bank. This option should be considered carefully as it can have significant financial implications.

It’s important to be proactive and advocate for your best interests when dealing with a low appraisal. By exploring your options and gathering additional evidence, you may be able to dispute the appraisal and secure a higher value for the property.

Getting a Second Opinion

If you receive a low appraisal that you disagree with, it may be worth considering obtaining a second opinion from a different licensed appraiser. This can provide additional information to support your case, especially if you believe certain factors were overlooked in the initial estimation. However, keep in mind that getting a second opinion comes with an additional cost. While it can be beneficial, it is important to weigh the potential benefits against the added expense.

Funding the Difference

If the appraisal comes in lower than the purchase price, you may need to fund the difference yourself. This means you will have to come up with additional funds to cover the gap between the appraised value and the purchase price. This can be a significant challenge, especially if you have already made a large down payment. However, some lenders may be willing to work with you to find alternative financing options or adjust loan terms to bridge the gap. It is important to explore all options and work closely with your lender to find a solution that works for you.

Protecting Yourself from Low Appraisals

To avoid low appraisals, it is important to take certain steps. Consider the following:

Review comparable properties (comps) to get an idea of the market value of your property.
Educate the appraiser about any unique features or recent upgrades in your property.
Have a rainy day fund in case the appraisal comes in lower than expected.
Work with an experienced realtor who can guide you through the appraisal process.

By taking these steps, you can protect yourself from low appraisals and ensure that your investment is safeguarded.

Review Comparables Before Making an Offer

Before making an offer on a home, it’s important to review comparables in the area. Comparables are recently sold homes that are similar in size, location, and condition to the property you’re interested in. This allows you to get a better understanding of sale prices and how they relate to the home you want to purchase.

By analyzing these properties, you can gauge whether the listing price is fair or if it needs negotiation. Reviewing comps provides insight into market trends and helps determine what other buyers have been willing to pay for similar properties.

Taking the time to analyze comparables can empower you with valuable knowledge during negotiations and ensure that your offer aligns with current market conditions. By researching comps before making an offer, you increase your chances of putting forth a competitive bid that accurately reflects the property’s value.

Consider the following factors when reviewing comparables:

Location: Properties in the same neighborhood or nearby areas are the most comparable.
Size: Look for properties with similar square footage, number of bedrooms, and bathrooms.
Condition: Properties in similar conditions, such as age and upgrades, are the most comparable.

By keeping these factors in mind, you can make a more informed decision when making an offer on a property.

The Role of the Listing Agent in Educating the Appraiser

The listing agent is an essential source of information for the appraiser to understand the true value of the property being sold. The agent must provide detailed information on the home’s features, upgrades, and unique qualities. This information helps the appraiser make an accurate assessment of the property’s worth.

The Importance of Having a Reserve Fund

When dealing with low valuations during a home buying process, having a reserve fund is crucial for both buyers and sellers. This fund can help bridge the gap between the estimated value and the agreed-upon purchase price, ensuring a smooth transaction without any financial hurdles or delays.

In addition to providing financial security, a reserve fund acts as a safety net for unexpected expenses or emergencies that may arise during or after the home buying process. This can provide peace of mind for both buyers and sellers, knowing that they are protected from potential financial strain.

To protect yourself from such situations, it is recommended to work with an experienced realtor who can guide you through the process and help you establish a reserve fund that suits your needs.

Conclusion

Knowing the difference between bank appraisals and real estate appraisals is crucial for both buyers and sellers in Canada. Bank appraisals focus on protecting lenders’ investments, while real estate appraisals provide an unbiased estimate of a home’s value. To navigate the home buying and selling process with confidence, it’s important to be informed about the appraisal process and take steps to protect yourself from low appraisals. Working with an experienced realtor like Richard Morrison can provide you with all the necessary information for a successful transaction.

Q: What is the difference between a bank appraisal and a real estate appraisal?

When it comes to property valuation, there are two types of appraisals that are commonly used: bank appraisals and real estate appraisals. While both types of appraisals aim to determine the value of a property, there are some key differences between them.

Bank Appraisal

A bank appraisal is an appraisal that is ordered by a lending institution when a borrower applies for a mortgage loan. The main purpose of a bank appraisal is to determine the market value of the property that is being used as collateral for the loan. The bank wants to ensure that the property is worth at least as much as the loan amount, so that they can recoup their investment if the borrower defaults on the loan.

Bank appraisals are typically conducted by licensed appraisers who are approved by the lending institution. The appraiser will visit the property and conduct a thorough inspection, taking into account factors such as the property’s location, size, condition, and any recent renovations or upgrades. They will also look at comparable properties in the area that have recently sold, in order to determine the market value of the property.

Real Estate Appraisal

A real estate appraisal, on the other hand, is an appraisal that is conducted by a licensed appraiser for a variety of purposes, such as estate planning, tax assessment, or divorce proceedings. The main purpose of a real estate appraisal is to determine the fair market value of the property, which is the price that the property would likely sell for in an open and competitive market.

Real estate appraisals are also conducted by licensed appraisers, who use similar methods as bank appraisers to determine the value of the property. However, real estate appraisals may take into account additional factors, such as the property’s potential for rental income or its historical significance.

In summary, the main difference between a bank appraisal and a real estate appraisal is the purpose for which they are conducted. Bank appraisals are used to determine the value of a property for mortgage lending purposes, while real estate appraisals are used for a variety of purposes, including estate planning, tax assessment, and divorce proceedings.

Q: When do you need a bank appraisal when buying a home?

When purchasing a home with a mortgage loan, the lender will typically require a bank appraisal to determine the value of the property. This is to ensure that the loan amount does not exceed the value of the property, which would put the lender at risk if the borrower defaults on the loan.

Here are some situations where a bank appraisal may be required:

When purchasing a home with a mortgage loan
When refinancing a mortgage loan
When taking out a home equity loan or line of credit

It’s important to note that a bank appraisal is different from a real estate appraisal. A bank appraisal is typically conducted by a licensed appraiser who is hired by the lender, while a real estate appraisal is typically conducted by a licensed appraiser who is hired by the buyer or seller.

During a bank appraisal, the appraiser will visit the property and evaluate its condition, size, location, and other factors that can affect its value. The appraiser will then compare the property to similar properties in the area to determine its market value.

If the bank appraisal determines that the property is worth less than the loan amount, the lender may require the borrower to make a larger down payment or may refuse to approve the loan altogether.

In summary, if you’re purchasing a home with a mortgage loan, refinancing a mortgage loan, or taking out a home equity loan or line of credit, you will likely need a bank appraisal to determine the value of the property. It’s important to understand the difference between a bank appraisal and a real estate appraisal, and to be prepared for the possibility that the bank appraisal may affect your loan approval.

Q: What does an appraisal report include?

An appraisal report is a document that provides an estimate of the value of a property. It includes a detailed analysis of the property and its surroundings, as well as an assessment of the current market conditions. The following are some of the key components that are typically included in an appraisal report:

Property description: This section provides a detailed description of the property, including its location, size, and condition. It may also include information about any unique features or amenities that the property offers.
Comparable sales analysis: This section compares the subject property to similar properties that have recently sold in the same area. This analysis helps to determine the fair market value of the property.
Market conditions analysis: This section provides an overview of the current real estate market conditions in the area where the property is located. It may include information about trends in property values, supply and demand, and other factors that may impact the value of the property.
Valuation conclusion: This section provides the appraiser’s final estimate of the value of the property. It may include a range of values based on different valuation methods, as well as an explanation of how the appraiser arrived at their final estimate.

Overall, an appraisal report provides a detailed and objective analysis of the value of a property. It is an important tool for both buyers and sellers, as well as for lenders who are considering financing a property purchase.

Q: How much does it cost for a home appraisal?

The cost of a home appraisal can vary depending on several factors, including the type of appraisal needed and the location of the property. In general, a bank appraisal tends to be more expensive than a real estate appraisal.

Here are some typical costs for different types of home appraisals:

Bank appraisal: $300-$500 or more
Real estate appraisal: $250-$400 or more
FHA appraisal: $400-$700 or more

It’s important to note that these are just estimates and that actual costs may vary depending on the specific circumstances of the appraisal. Additionally, some appraisers may charge more or less than these estimates based on their experience and reputation.

When choosing an appraiser, it’s important to consider both the cost and the quality of the appraisal. While it may be tempting to go with the cheapest option, a low-quality appraisal could end up costing you more in the long run if it results in an inaccurate valuation of your property.

Q: What happens if your home’s appraised value comes in lower than you anticipated?

If your home’s appraised value comes in lower than you anticipated, it can have a significant impact on your plans. Here are some things to keep in mind:

Your mortgage lender may only approve a loan for the appraised value of the home, which means you may need to come up with additional funds to cover the difference between the appraised value and the sale price.
If you’re selling your home, a low appraisal can make it more difficult to sell your home for the price you want. You may need to lower your asking price or negotiate with potential buyers to reach a compromise.
If you’re refinancing your home, a low appraisal can impact the terms of your loan. You may not be able to get the interest rate or loan terms you were hoping for.

If you believe the appraisal is incorrect, you may be able to challenge it. However, this can be a difficult and time-consuming process. It’s important to carefully review the appraisal report and gather evidence to support your case before deciding to challenge the appraisal.

Overall, a low appraisal can be frustrating and disappointing, but it’s important to stay calm and consider your options before making any decisions.

Q: Do You Have to Get an Appraisal When You Purchase a Home in 2022?

When you purchase a home in 2022, you may wonder if you need to get an appraisal. The answer depends on several factors, including the type of loan you are getting and the lender’s requirements.

If you are getting a conventional loan, an appraisal is typically required. This is because the lender wants to ensure that the home is worth the amount of money they are lending you. The appraisal will determine the fair market value of the home, taking into account factors such as the home’s location, condition, and size.

If you are getting an FHA or VA loan, an appraisal is also typically required. These loans are backed by the government, and the government wants to ensure that the home is worth the amount of money they are guaranteeing.

In some cases, you may be able to waive the appraisal requirement. For example, if you are paying cash for the home, you may not need an appraisal. However, it’s important to note that waiving the appraisal requirement can be risky, as you may end up overpaying for the home.

In summary, whether or not you need to get an appraisal when you purchase a home in 2022 depends on the type of loan you are getting and the lender’s requirements. It’s important to work closely with your lender to understand their specific requirements and ensure that you are meeting them.

Q: What to Do If There’s Competition for Your Dream Home in Today’s Competitive Housing Market?

In today’s competitive housing market, it’s not uncommon to face competition for your dream home. Here are some tips to help you navigate this situation:

Stay within your budget: It’s important to have a clear idea of your budget before you start house hunting. Stick to your budget and avoid getting into a bidding war that could put you in a precarious financial situation.
Make a strong offer: If you’re serious about a property, make sure your offer is strong and competitive. This may mean offering more than the asking price, but be sure to consult with your real estate agent and lender to ensure that you’re not overextending yourself.
Be flexible: If you’re able to be flexible with your closing date or other terms of the sale, it may give you an advantage over other buyers who are less flexible.
Get pre-approved: Getting pre-approved for a mortgage can give you a competitive edge in a bidding war. Sellers are more likely to take your offer seriously if they know you’ve already been approved for financing.
Consider a backup plan: If you don’t get the property you want, have a backup plan in place. Keep looking at other properties and be prepared to make an offer on another property if necessary.

Remember, competition for your dream home can be intense, but it’s important to stay calm and focused throughout the process. With the right strategy and a little bit of luck, you can still end up with the home of your dreams.

Q: How does an appraisal benefit you as a potential home buyer?

Getting an appraisal as a potential home buyer can help you in the following ways:

Protects you from overpaying for your dream home
Can save you thousands of dollars in the long run
Provides proof of an accurate assessment to lenders, which is often required for mortgage approval

Overall, an appraisal is an important step in the home buying process that can give you peace of mind and protect your financial interests.

What is the Difference Between a Bank Appraisal and a Home Appraisal?

When it comes to the difference between a bank appraisal and a home appraisal, the key factor is who commissions the appraisal. A bank appraisal is required by the bank as part of the mortgage process, while a home appraisal is commissioned by either the buyer or the seller to determine the fair market value of the property. Here are some key differences to keep in mind:

Bank appraisals are required by the bank and are typically more strict in their evaluation criteria.
Home appraisals are commissioned by the buyer or seller and are used to determine the fair market value of the property.
Bank appraisals are often required to secure financing, while home appraisals are useful in determining a fair price for the property.
Bank appraisals are typically more detailed and may take longer to complete than a home appraisal.
Home appraisals may be more subjective in nature, as they are commissioned by the buyer or seller and may be influenced by personal biases.

Overall, understanding the difference between a bank appraisal and a home appraisal can help you navigate the home buying or selling process with confidence and clarity.

Can a Real Estate Agent Conduct an Appraisal?

Real estate agents are not qualified to conduct appraisals on properties. An appraisal must be carried out by a certified home appraiser who has the necessary training and qualifications to determine the value of a property. However, a real estate agent can provide a comparative market analysis (CMA) to their clients. A CMA is an informal estimate of a property’s value based on comparable properties in the same area.

Latest Vancouver Listings

If you’re looking for the latest Vancouver listings, you can start your search with Richard Morrison, a top award-winning Vancouver realtor with over 20 years of experience. As a Medallion Club member and RE/MAX Hall of Fame award-winning agent, Richard has the expertise you need to make your real estate journey seamless and rewarding. Contact Richard today at (778) 900-2235 to turn your real estate dreams into reality.

Vancouver East Houses

Vancouver East is a popular area for homebuyers, and there are currently many houses available for sale. Some of the latest Vancouver East houses on the market include:

1234 Main St: This charming 3-bedroom, 2-bathroom house is located in a quiet neighborhood and boasts a spacious backyard. It’s listed for $950,000.
5678 Elm St: This newly renovated 4-bedroom, 3-bathroom house features an open-concept living area and a modern kitchen. It’s listed for $1,200,000.

Vancouver West Houses

Vancouver West is another sought-after area for homebuyers, and there are currently many houses available for sale. Some of the latest Vancouver West houses on the market include:

9012 Oak St: This stunning 5-bedroom, 4-bathroom house features high ceilings, a gourmet kitchen, and a spacious backyard. It’s listed for $2,500,000.
3456 Maple St: This beautiful 6-bedroom, 5-bathroom house boasts a grand entrance, a large living area, and a private backyard. It’s listed for $3,000,000.

Vancouver East Apartments

If you’re looking for an apartment in Vancouver East, there are currently many options available. Some of the latest Vancouver East apartments on the market include:

7890 Main St #101: This cozy 1-bedroom, 1-bathroom apartment features a modern kitchen and a spacious living area. It’s listed for $400,000.
2345 Elm St #202: This bright 2-bedroom, 2-bathroom apartment boasts a large balcony and stunning mountain views. It’s listed for $600,000.

Vancouver West Condos

Vancouver West is a popular area for condo living, and there are currently many options available. Some of the latest Vancouver West condos on the market include:

6789 Oak St #405: This luxurious 2-bedroom, 2-bathroom condo features high-end finishes and stunning city views. It’s listed for $1,500,000.
1234 Maple St #601: This spacious 3-bedroom, 2-bathroom condo boasts a large balcony and a modern kitchen. It’s listed for $2,000,000.

In conclusion, while a real estate agent cannot conduct an appraisal, they can provide a comparative market analysis to their clients. If you’re in the market for a new property in Vancouver, be sure to check out the latest listings in Vancouver East and West for houses, apartments, and condos.

Frequently Asked Questions

What factors can affect a home appraisal?

Several factors can impact a home appraisal, including the home’s location, condition, and size. The appraiser will also consider the value of similar homes in the area, local real estate market trends, and any recent renovations or upgrades. Other factors that may affect the appraisal value include the home’s age, the number of bedrooms and bathrooms, and the overall layout and design.

Do bank appraisers inspect the interior of the house?

Yes, bank appraisers typically inspect the interior and exterior of the home to assess its condition and value. During the inspection, the appraiser will evaluate the home’s overall condition, including its structural integrity, electrical and plumbing systems, and any visible damage or wear and tear. The appraiser may also take photos of the home’s interior and exterior to document their findings.

How accurate are bank home appraisals?

Bank appraisals are generally considered to be accurate, as they are conducted by licensed professionals who are trained to evaluate a home’s value based on a variety of factors. However, it’s important to note that appraisals are only estimates of a home’s value and may not always reflect the true market value. Additionally, appraisals can vary depending on the appraiser’s methodology and the specific factors they consider.

What is the difference between appraised value and market value?

Appraised value refers to the estimated value of a home as determined by a licensed appraiser. Market value, on the other hand, refers to the price that a buyer is willing to pay for a home in the current real estate market. While appraised value is based on a variety of factors, including the home’s condition and location, market value is influenced by supply and demand, economic conditions, and other market forces.

What does a bank appraisal entail?

A bank appraisal typically involves a thorough inspection of the home’s interior and exterior, as well as an evaluation of the home’s value based on a variety of factors. The appraiser will consider the home’s location, condition, size, and other factors when determining its value. They may also research recent sales of similar homes in the area to help determine the home’s value.

What happens if the bank appraisal is higher than the offer?

If the bank appraisal is higher than the offer, it can be a positive sign for the buyer. A higher appraisal value can help the buyer secure financing and may also give them leverage in negotiations with the seller. However, it’s important to note that a higher appraisal value does not necessarily mean that the buyer should pay more for the home. Ultimately, the buyer and seller will need to come to an agreement on the final sale price based on a variety of factors.