Minnesota State Real Estate Practice Test 2025 - Free Real Estate Practice Questions and Study Guide

Question: 1 / 400

When is an appraisal typically required?

When listing a property for rental

When applying for a mortgage

An appraisal is typically required when applying for a mortgage because lenders need to ensure that the property being financed is worth the amount they are lending. The appraisal provides an independent assessment of the property's value, which protects both the buyer and the lender. An accurate appraisal helps to confirm that the lender is not providing a loan that exceeds the value of the property, thereby reducing the risk of financial loss if the borrower defaults on the loan.

In other scenarios, such as listing a property for rental or selling to a family member, an appraisal may not be necessary, as these situations do not typically involve a lender's requirement for valuation. Similarly, when closing a sale without financing, there may not be a need for an appraisal because there is no lender involved needing that assurance of property value.

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When selling a property to a family member

When closing a sale without financing

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