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House Appraisals are very important to your lender. Lenders use appraisals to ensure that they have a way to recover their losses, should the borrower default on the loan. A thorough appraisal will indicate to the lender whether the property is marketable enough to sell for a profit if they should have to.

The cost of a typical appraisal can range from $350 to $400. Buyers are obligated to pay for the appraisal--whether the outcome is favorable to them or not.

A Uniform Residential Appraisal Report (URAR) takes a number of factors into consideration to calculate an "average" price for the property. A URAR relies on interior and exterior pictures of the property as well as a cost break down of the property's features.

In addition, an appraiser will use comps to determine the value of the property in comparison to similar properties in the area.

If an appraisal indicates to your lender that the value of the house is not reflected in the proposed purchase price, you will not receive a loan to purchase the property. If the appraisal comes in too low or too high, lenders will not see a loan for this property as a good investment for them.

Remember that lenders usually control which appraiser is used in order to ensure that they are satisfied with the results.