A real estate appraisal is used to estimate the value of the property you're buying. An appraiser will compare your home's current sale price to other similar homes that have recently sold in your area. When making the appraisal, the appraiser will consider the property's location, amenities, and physical condition.

An appraisal will be ordered after you've negotiated your purchase contract with the seller. The appraisal is necessary to make sure the value of your home is at least equal to the amount of your home loan. A home must appraise for at least the asking price, or negotiated price in order for you to receive the loan.