Recent government regualations have stopped communication between a loan officer and an appraiser. because of this, most banks use appraisal management services. What these services do is call in appraisers that are willing to take a lower fee from them, who may not be as familiar with an area. Sometimes it doesn't matter, but other times you may have a similar house in a section of a town that is either much more or less desirable than the home being appraised, and the appraiser doesn't know about this. This, along with other new regulations that are going into effect on January 1st are supposed to protect the borrower when they are applying for a mortgage, and supposedly save them money, but in my mind it seems that these things are all costing people more, and will add to the confusion of an already difficult process.
Although not a home inspection, the appraiser will turn on the water, flush the toilets, check to see if the furnace works, etc.
This is especially important for FHA financing, where anything that affects the safety of the future occupants will come into play. Tripping hazards, broken windows, impropertly positioned downspouts, evidence of mold, etc., can all hold up the financing of a property.
In short, it tells you a lot.
Call me with any questions.
Sr. Mortgage Consultant
3317 W. Irving Park Rd.
Chicago, IL 60618
The appraisal is also used for verification of collateral for the loan you're taking out on that property.
Your lender wants to know that the property value is the same as what they are going to loan you.
It's also for the buyer's best interest to have the appraisal as you want to make sure you're not overpaying for a property. It can also reveal if the property is "over" built for the area comp's which means it may not be a good investment.
Bottom line is it's a justification factor for the price the property is being purchased for on the market. (the process is a little more in depth than this but I just tried to simplify it)
Best of luck!