appraisal
Appraisal is a professional's independent estimate of what a property is truly worth, used mainly to protect a lender before they release mortgage money.
In plain English
Think of the last time you sent someone to check a car before you paid for it, someone with no interest in whether the deal went through, just there to tell you the plain truth about the engine and the bodywork. An appraisal does that job for property. A licensed valuer visits the house or land, looks at its condition, size, location and recent sales of similar properties nearby, then writes a report stating what it is genuinely worth in today's market.
This matters most when a mortgage is involved. Say a man in Lekki agrees to buy a duplex for ₦85,000,000 and applies to a bank for a mortgage to cover most of it. Before the bank hands over a kobo, they send their own appraiser, not the seller's friend, not the buyer's cousin who does agency work on the side. If that appraiser values the duplex at ₦70,000,000, the bank will typically lend based on that lower figure, not the ₦85,000,000 asking price. Suddenly the buyer either finds extra cash, renegotiates with the seller, or the deal falls apart entirely.
In the United Kingdom this is standard practice too. Someone buying a terraced house in Manchester for £220,000 will have the lender arrange a survey and valuation, and if it comes back at £205,000, the mortgage offer adjusts accordingly, leaving the buyer to bridge the gap or walk away.
This is why an appraisal is not the same as an asking price, and definitely not the same as sentimental value. A seller can dream up any figure they like, but the appraiser answers to the numbers, the comparable sales, and the real condition of the property, not to anyone's hopes.
A buyer agrees ₦60,000,000 for a plot in Abuja, but the bank's appraiser values it at ₦52,000,000 based on recent land sales in that area, so the bank offers a mortgage based on ₦52,000,000, leaving the buyer to cover the ₦8,000,000 shortfall or renegotiate.
Questions people ask
Who pays for the appraisal, the buyer or the seller?
Usually the buyer pays, since it is typically required as part of getting mortgage approval, and the fee is often included in the closing costs paid at completion.
Can I challenge a low appraisal?
Yes, you or your agent can ask for a review, provide extra comparable sales the appraiser may have missed, or request a second appraisal, though the lender has the final say on which figure it accepts.
Is an appraisal the same as a home inspection?
No, an appraisal focuses on market value for the lender's benefit, while an inspection digs into the physical condition of the property, checking things like plumbing, wiring and the roof, mainly for the buyer's benefit.
Last reviewed