For some years now, banks are known to perform appraisals on properties, they perform appraisals to help determine what loan collateral could be worth if it comes to the worst. In other words, no bank would like to get stuck with a property worth just $100,000 while they lent the borrower over a million dollars for, no home buyer would either want to be found in such case. A buyer might have offered $880,000 for a property while the true worth of that property is just $845,000. The bank gets to the losing side if there is a default on your payments. Appraisals are used by banks to make sure the money they lend is protected.
The use of appraisals is for good and safety reasons like most people would misinterpret it. Bank appraisals can as well make tough times for both buyer and seller when it’s done after a price negotiation have been made and agreed upon and the agreement to buy or sell the property has been made and the contract signed. An appraisal can work at everyone’s interest if the appraisal is close to the agreed upon price by both parties.