Qualified Appraisal

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Definition of 'Qualified Appraisal'

A qualified appraisal is a document prepared by a qualified appraiser that estimates the fair market value of a property. The appraisal must be conducted in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP).

The purpose of a qualified appraisal is to provide an objective and unbiased opinion of the value of a property. The appraisal is used to support the loan application and to determine the amount of the loan that can be secured.

The qualified appraiser must be a member of a recognized appraisal organization and must have at least two years of experience appraising real estate. The appraiser must also have a current state license or certification.

The appraisal must be based on the following:

* The highest and best use of the property
* The sales prices of comparable properties
* The cost to replace the property
* The income that the property can generate

The qualified appraisal must be completed within 60 days of the date of the loan application. The appraisal must be submitted to the lender along with the loan application.

The lender will use the qualified appraisal to determine the amount of the loan that can be secured. The loan amount will be based on the lesser of the appraised value or the purchase price of the property.

If the appraised value is less than the purchase price, the borrower may be required to make a down payment or to bring additional funds to closing.

A qualified appraisal is an important part of the loan process. It provides the lender with an objective and unbiased opinion of the value of the property and helps to ensure that the loan is made in a safe and sound manner.

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