The customer usually pays the appraisal fee, which can be numerous hundred dollars.1An appraisal is an objective professional opinion of a house's worth.

Appraisals are often used in purchase-and-sale deals and typically used in refinance transactions.

In a re-finance transaction, an appraisal ensures the lending institution that it isn't handing the customer more cash than the house is worth.2If the borrower must default on the home loan and go into foreclosure, the loan provider will sell the home to recover the cash it lent.

Since the appraisal primarily secures the lending institution's interests, the lending institution will usually order the appraisal.3About Home Appraisal ExpertsAccording to the Appraisal Institute, an association of expert property appraisers, a certified appraiser must be certified or certifiedas needed in all 50 statesand be familiar with the city.

Per federal policies, the appraiser must be impartial and have no direct or indirect interest in the deal.

A residential or commercial property's appraisal value is affected by current sales of similar properties and by existing market patterns.4The appraiser needs to do a total visual examination of the exterior and interior and keep in mind any conditions that adversely affect the residential or commercial property's value, such as needed repairs.