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Rainer
352,976
Teri Pacitto
Compass - Westlake Village, CA
Real Estate, Your Style...Your Home...My Specialty

An appraisal is an opinion of value at the time of sale and assists in determining if a lender will loan on that property.  There is no protection other than for the lending institution.  The appraisal might not even protect the lender in the case of a declining market.  There are many variables that can affect the value and it is an ever moving target.  

Jun 20, 2016 08:39 AM
Rainmaker
3,988,007
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

It is for the benefit of the lender/investor so the loan can be sold. A homeowner doesn't get protection other than knowing it is worth what they are paying.

Jun 20, 2016 07:52 AM
Rainmaker
5,583,278
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

the only protections are for the lending institutions......

Jun 20, 2016 06:45 AM
Ambassador
2,684,009
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

## It protects the Lender, in case the mortgagor defaults. 

Jun 20, 2016 06:23 AM
Rainmaker
4,434,127
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

The others have  answered.

Jun 21, 2016 10:10 PM
Rainmaker
4,936,558
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

It is a opinion of value, but not always right.

Jun 21, 2016 12:31 AM
Rainmaker
5,216,381
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Appraisals are an opinion of value. Most times they are on point. I have seen some that were absurd, especially on multifamily properties.

Jun 20, 2016 11:21 PM
Rainmaker
4,882,355
Richard Weeks
Dallas, TX
REALTOR®, Broker

By knowing what they are doing.

Jun 20, 2016 11:01 PM
Rainmaker
3,416,038
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Simply put to make sure the value is at least what the purcase price is. The bank does not want to give a mortgage if the home is worth less

Jun 20, 2016 10:58 PM
Rainmaker
3,071,489
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

They protect the lenders - to a certain extent.

And what Kenneth J. Jones said...

Jun 20, 2016 09:20 PM
Rainmaker
7,835,494
Roy Kelley
Retired - Gaithersburg, MD

Lenders do not want to over lend.

Jun 20, 2016 09:10 PM
Rainmaker
634,482
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

They don't. An appraisal is just an estimate of value, useful for lenders to determine the risk of the loan but no real protection.

Jun 20, 2016 06:30 PM
Rainmaker
4,319,419
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Minnette Olsen - well, the home owners get to know the market value of their home...

Jun 20, 2016 04:23 PM
Ambassador
3,727,873
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

They usually don't protect anyone.  Almost all of them come in right at the contract price. 

Jun 20, 2016 01:52 PM
Rainmaker
1,771,867
Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

I agree with Barbara Todaro (for about the 3rd time in a week)

Jun 20, 2016 01:49 PM
Rainmaker
2,362,701
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

By providing a valuation

Jun 20, 2016 11:54 AM
Rainmaker
3,986,258
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

It gives a much clearer value of a property than just guessing

Jun 20, 2016 10:49 AM
Rainmaker
1,466,207
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Minnette Olsen An appraisal doesn't protect anyone. It provides the value on which a loan is based.

Jun 20, 2016 08:44 AM
Ambassador
6,393,154
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

NO.

They just give a snapshot of one persons opinion of value at one moment of time, and all will be careful to make it known that this is not a warranty.

Jun 20, 2016 07:47 AM
Rainmaker
1,239,901
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Lenders want to make sure the loan is less than the property value if it is not insured with the gov't. 

Jun 20, 2016 06:22 AM
Rainmaker
1,712,676
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

It creates a contingency in the contract, that's it.

Jun 20, 2016 05:57 AM
Ambassador
2,178,553
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

Kenneth J. Jones gave a very good answer.  That said, though, appraisals tend to be more valuable to out-of market buyers who are not familiar with local values.  Someone from California, for example, may think a property is an amazing buy in my market when, in fact, it is overpriced for current conditions.  

An appraisal is intended to protect the lender and the buyers but, in reality, it does neither.  

Jun 20, 2016 05:51 AM
Rainmaker
2,781,163
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

If they are done with care, it levels the playing fields via value transparency

Jun 20, 2016 05:25 AM
Rainmaker
469,510
Dan & Laurie Pittsenbarger Team
Keller Williams Western Realty - Bellingham, WA
Lakeside & Coastal Single Family Homes

In my opinion, the appraisal and the appraisal process pretty much only protect the lender. There's a "story"/angle that talks about protecting the consumer/public but I don't by it.

Jun 20, 2016 05:04 AM