"But a higher-than-offer appraisal is almost always good news for buyers. When a home appraises high, it means the property is worth more than what you're paying-giving you built-in equity before you even move in. While it won't change your loan terms or reduce your down payment, it can benefit you later if you refinance, remove private mortgage insurance (PMI), or sell."
"Is it good if the appraisal is higher than the offer? When the appraisal shows a home's value is more than the purchase price, it usually means comparable homes are selling for more, there are upgrades in the home that aren't noted on the listing, the market is appreciating quickly, or the home is priced below market value. But when the appraisal comes back high, it can also bring certain advantages for buyers:"
An appraisal determines a home's market value so lenders can align the loan amount with the property's worth. If an appraisal falls below the purchase price, buyers may need to cover the difference with additional cash. A higher-than-offer appraisal gives buyers built-in equity and does not change loan terms or down payment amounts. Lenders calculate loan-to-value (LTV) using the lower of purchase price or appraisal, so a higher appraisal improves the LTV ratio. Higher appraisals can speed PMI removal and strengthen options for refinancing or selling later. Causes include stronger comparable sales, unlisted upgrades, rapid market appreciation, or underpricing.
Read at Redfin | Real Estate Tips for Home Buying, Selling & More
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