Usually assigned after initial review of credit and property documents, before final approval and mortgage. For construction in development, the bank may have separate rules for allowable grade and subsequent assessments.
It is prepared by an appraiser accepted or commissioned by the creditor according to its process. The buyer may pay the expense, but the recipient and user of the appraisal is often the bank; verify your access to the entire report.
If the appraised value is below the purchase price, the co-payment may increase or the loan may not be approved in the expected amount. The report may reveal a different purpose, area, condition or limited liquidity.
What the document proves
What can you establish from it?
Each document answers a different question. A single document is rarely enough to prove title, completed construction work and the basis for payment at the same time.
What does it establish?
Establishes the professional opinion on the value as of the specified date and with the described assumptions, documents and methodology. For the bank, the report is the basis for the assessment of collateral and credit risk.
What does it not establish?
It does not guarantee future sales price, credit approval, ownership, freedom from encumbrances, construction legality or technical soundness. The assessment accepted by the bank does not replace the legal verification and inspection.
What to look for in the document
Which details should you compare?
Check contractor and appraiser, date, purpose, identifier, address, area, purpose, degree of completion, documents, inspection, comparable transactions, assumptions, restrictions and final value. Compare with the contract and the cadastral scheme.
What comes before and after?
Prior to the assessment, documents for ownership, cadastre and construction are collected. After that, the creditor makes a separate credit and legal assessment. A positive evaluation in itself is not a final offer or approval for credit.
Where the document comes from
Finding and checking it
Mesto does not commission bank appraisals, does not obtain credit decisions and does not calculate financing. Public data in a Mesto report is not an appraisal report for a bank.
The process is arranged through the selected lender or an appraiser approved by it. Ask to see the report and the list of missing documents, not just the reported final value.
When do you need a professional review?
The loan officer explains the bank requirements, the appraiser explains the assumptions and value, and the lawyer explains the legal terms. If technical problems or limitations are noted in the report, include an engineer or architect.
Before you continue
Check these details
Use this list to prepare for a conversation with the seller or a specialist you trust.
- 01
Check that the rating is for the correct object, purpose and grade.
- 02
Read the assumptions, limitations and documents used.
- 03
Calculate the out-of-pocket costs and costs at a lower valuation.
- 04
Do not treat the appraisal as credit approval or legal verification.