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What is an appraisal? What is an evaluation?

When you apply for a mortgage loan, generally, as part of the loan underwriting process, the bank will order an appraisal or an evaluation to determine the value of the property that is being used to secure the loan. An appraisal is a written statement prepared by a licensed or certified appraiser that states the appraiser’s opinion as to the market value of a property.  An appraisal must be prepared in conformance with the Uniform Standards of Professional Appraisal Practice.

An evaluation is an alternative to an appraisal that lenders can use in some situations where an appraisal is not required by law. An evaluation, like an appraisal, provides a written estimation of the market valuation of a property but is generally less costly and can be prepared faster.

Both appraisals and evaluations are opinions as to the market value as of a specific date, supported by the presentation and analysis of relevant market information. At the time of closing or upon consummation of a refinance transaction, the actual value of the subject property may be more or less than the value contained in the appraisal or evaluation.

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on should not be construed as legal advice or a legal opinion of the OCC.

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