What is an appraiser?

Appraisers are licensed or certified professionals who provide a qualified opinion of value. All states require appraisers to be licensed or certified to provide appraisals to federally regulated lenders. Meaning, you’re working with a highly trained individual who understands current real estate market conditions in your area.

Appraisers are considered third-party participants in the transaction. Their work assures mortgage lenders that the amount they are lending does not exceed the home’s true value. Yet, it also assures that you (as the home buyer or homeowner) are receiving a fair, unbiased price for your property.

How is a home appraised?

During a home appraisal, a licensed appraiser conducts a thorough inspection of the property.

The appraiser will consider all factors that could affect the property’s value. These factors include the condition of the property, any upgrades or additions made to the property, the size of the lot and “comps” or recently sold properties of comparable size and condition in the same market.


What Does a Home Appraisal Cost?

Home appraisals typically cost between $300 and $450. The home's location, size, and condition factor into the cost. Appraisers should work on a flat fee or hourly basis. If the appraiser expects to be paid a percentage of the home's value, it can signal an unethical practice, which should be avoided.

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How to prepare

Maximize your home value ahead of time, so your home appraises as high as it can. This may include significant work such as home renovations, or simple tasks like the ones listed in the checklists below:

Appraisal checklist for buying a home

  1. Review neighborhood home values and recent sales

  2. Assess your desired home’s condition so you can plan ahead for necessary repairs

  3. Include an appraisal contingency so your offer can be withdrawn if the appraisal comes up short

Appraisal checklist for selling or refinancing a home

  1. Ensure your landscaping is on point as “curb appeal” is considered during an appraisal

  2. Repairing damaged drywall or painting rooms can factor into your valuation

  3. Make sure every light switch, wall outlet, fan, or vent works

  4. Document recent home improvements with estimated prices and dates

  5. Provide copies of previous appraisals

  6. Make sure all rooms of the house are accessible

  7. Be flexible and coordinate the appointment around the appraiser’s schedule

  8. Let the appraiser do the inspection without distraction

Tip: if you have an FHA loan and are doing a streamline refinance, typically an appraisal isn’t needed.

Be aware of the $500 rule

Appraisers tend to value property in $500 increments – like $300,000, $300,500, $301,000, etc. Because appraisals with $500 increments are common, it’s in your best interest to make small repairs if you are selling your home or refinancing. Even the smallest of changes can contribute to the overall condition of your property.

Want a better understanding of home value? Read our guide on appraised value vs. market value vs. assessed value.

Home Appraisal Tips For Refinancers

When you’re refinancing, you want to get the highest appraisal value possible. A low appraisal value could keep you from refinancing, but a high appraisal value means more equity for you – which could mean more cash out or better loan terms. Here are some ways to up your chances of a high appraisal value.

Get An Outside Opinion

Your home is full of memories, which may give you blind spots when it comes to defects in your home. Have a friend or family member examine each room in your home and point out areas that can be improved. Sometimes, a new set of eyes is just what you need.


A thorough decluttering will help each room look more put-together. While your appraiser shouldn’t assess your home’s value based on how much clutter or mess there is, it’ll be easier for them to see your home favorably if everything’s put away nicely.

List Upgrades And Improvements

Upgrades and improvements can increase your property’s value, but the work you’ve done may not always be obvious. Did you get a new air conditioner? Replace the windows? Add new landscaping? Provide your appraiser with a list of upgrades you’ve made so they can consider these items in their report.

How to prepare for a home appraisal

As a buyer, your lender sets your appraisal appointment. After that, the appraiser will go into the home and report back with their findings and estimated home value. As a seller, there are several things you can do to prepare for your home appraisal and avoid anything that may damage its score.

Tidy up the inside and outside of your house

A home appraiser’s job is to be extremely critical. Although the tidiness of your closet won’t directly affect the value of your home, it will affect the appraisers’ experience in the space and how they might value the functionality of the space overall, which does affect its value.

For example, a home with small, cluttered rooms probably won’t perform as well as the same home whose small spaces are optimized. You can tidy up the inside of your home, do a deep clean and even throw a fresh coat of paint on some of the walls. Whether you do this on your own or hire someone to help is up to you.

As we mentioned earlier, curb appeal is the first thing a home appraiser will see. For starters, break out your lawnmower and pull those weeds. If your front or backyard is cluttered, try to find space for it in the garage, if you have one, or take time to give away items.

Check out home systems

Before your home appraiser comes, it may pay to have a professional assess your plumbing, heating/cooling and electrical systems, so you know where they’re all at in terms of functionality. That way, there are no surprises during your appraisal. You may choose to update or fix one of your systems if you’re confident it will pay off financially.

Getting a home appraisal is a necessary step as a homeowner for both the buyer and seller. As the buyer, a home appraisal will help determine how much the lender gives you and will help navigate a fair deal. Home appraisals help determine the value of a house, which can help determine a listing price and help prepare a house for sale. Keep these five factors in mind when preparing for your home appraisal.

Understanding Appraisal Values

An appraisal can make or break a home sale. It can move you to the next step in the home buying process or take you back to the negotiation table.

Read on to learn what it means when you get a value that’s different than expected, and what to do.

What Happens When A Home Appraisal Comes Back Higher Than Expected?

When the appraisal comes back higher than expected, it greatly benefits the home buyer. That’s because they’ll be getting a good deal on the home and have more home equity.

For example, if the buyer and seller agree on a purchase price of $150,000 and the home is appraised for $165,000, the buyer still purchases the home for $150,000 and automatically moves in with at least $15,000 of equity in the home. And, since the lender will be loaning at or less than what the home is worth, the process can continue toward the closing table.

The seller will not be made aware that the home was appraised for higher than the asking price. That way, they can’t try to demand more money (which would be in breach of the purchase agreement) or back out of the deal to sell the home for more later.

The seller will only know the results of the home appraisal if it comes in lower than expected, because it could affect the sale of the home.

What Happens If The Home Appraisal Comes Back Low?

A low appraisal can prevent the loan from moving forward or slow down the process because the lender cannot give more money than the home is worth. This can be a problem if any of the parties involved are relying on mortgage financing.

If the appraisal comes back low, don’t panic just yet. You may have a few different options, whether you’re buying, selling or refinancing. You can always try to negotiate with the sellers, lower the asking price, pay for the difference out of pocket or even back out of the deal if you aren’t able to make the new fair market value work in your favor.

What Is an Appraisal Report?

Typically, appraisers use the Uniform Residential Appraisal Report from Fannie Mae for single-family homes. The report asks the appraiser to describe the interior and exterior of the property, the neighborhood, and nearby comparable sales. The appraiser then provides an analysis and conclusions about the property’s value based on their observations.

The appraisal report must include:

  • A street map showing the appraised property and comparable sales used
  • An exterior building sketch
  • An explanation of how the square footage was calculated
  • Photographs of the home’s front, back, and street scene
  • Front exterior photographs of each comparable property used
  • Other pertinent information—such as market sales data, public land records, and public tax records—that the appraiser requires to determine the property’s fair market value.

When refinancing a mortgage, if the appraisal value puts your home equity at less than 20%, you’ll get stuck paying for private mortgage insurance (PMI).

2. Refinancing your home

When you refinance your home, you’re actually replacing your old mortgage with a new one because your home’s value may have changed since you first bought it. For that reason, lenders will require an appraisal to ensure the new mortgage amount can be justified by what the house is worth today. If the home’s value has increased since it was purchased, you may be able to get cash out as part of refinancing. However, if it has declined, you may have difficulty securing a new loan.

How Long Does A Home Appraisal Take?

In general, the home appraisal process can take up to a week or more to go from the date of inspection to the final report.

Before the lender can order the appraisal on a new property, you must put an offer in on the home, have it accepted and sign a purchase agreement. After that, the valuation process can begin.

1. Your Lender Orders The Appraisal

This process starts with the lender ordering the appraisal. Once the appointment is requested, an appraiser will come to inspect the home.

2. An Appraiser Comes To The House

Depending on the type of loan you get, your appraiser will inspect certain parts of the home for specific reasons. They’ll examine the home to learn more about its features, to ensure things like heat and electrical are working properly and that there are no safety issues.

Certain loans, like FHA loans and VA loans, may have more specific appraisal criteria than others. Many of the issues they find during the examination must be resolved before the buyer moves in. We’ll discuss some of the appraisal criteria for different loans later in this article.

3. The Appraiser Creates A Report

Once the appraiser completes their inspection, they will review comps to calculate the fair market value of the home. The appraiser will create a report that contains a detailed description of the property, including its condition and its basic and unique features, plus the final number for the property’s value.

This report may also include general data on the market and the home’s location, other properties used as comps and information that supports the appraiser’s findings and final valuation. You will receive a copy of the report for your own records.

If the home is appraised at or above the purchase price, the loan will be processed as usual. If the home is appraised lower than the agreed-upon purchase price, more steps will need to be taken since the lender cannot lend more money than the home is worth.

4. Your Loan Terms Are Finalized

After the appraisal is done and the purchase price is officially set (either by continuing or in the process of renegotiating), the lender will finalize your loan terms. You’ll receive a Closing Disclosure that details your down payment and closing costs as well as the terms of your mortgage, and then you’ll close on your loan.

If this sounds like too much hassle, there may be a way to bypass the process altogether, but this doesn’t happen often. In some rare cases, usually when working with Freddie Mac or Fannie Mae, it’s possible to skip the appraisal process and use a waiver. It should be noted that there’s some additional flexibility along with safety precautions being taken due to COVID-19.

How Much Does A Home Appraisal Cost (And Who Pays)?

As a general rule, most single-family home appraisals cost $300 – $400, while multifamily units typically cost upward of $600.

Even though most lenders require an appraisal as a condition of a loan closing, the buyer pays for the appraisal unless they negotiate for the seller to pay instead. The amount that a buyer pays for an appraisal depends on a number of factors, including the size of the home, the home’s location and the amount of property research that the appraiser ends up doing before they issue a final value report on the appraised value.

Keep in mind that if the property is on a very large plot of land, the appraisal cost will be more because the appraiser often surveys the boundary lines of the property to make sure that the listed square acreage is correct.

Buyers can also expect to pay a higher appraisal fee in a very rural area simply because there are fewer appraisers working in these areas. This might mean a longer wait for an appraisal as well. If you have any questions about how much your appraisal will cost, consult with your mortgage lender.

4. Applying for other loans

Other types of loans, including cash and business loans, may require you to use your home as a source of collateral. As with home equity loans, the bank will want to make sure the money it lends is supported by the current value of your property.

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