When buying or refinancing a home, a property appraisal is a key part of the mortgage process. An appraisal helps determine the fair market value of a home and ensures that both the lender and buyer are making an informed financial decision. Understanding how appraisals work can help you avoid surprises and stay confident as you move through the mortgage journey.
A home appraisal is a professional, unbiased estimate of a property’s market value conducted by a licensed appraiser. Lenders use appraisals to make sure the loan amount aligns with the property’s worth. This protects both you and the lender from overpaying for a home or financing more than it’s truly worth.
The appraisal value can directly affect how much you can borrow. If the appraisal comes in lower than the agreed-upon purchase price, you may need to renegotiate with the seller, pay the difference out of pocket, or walk away from the deal. If it’s higher, great news—you may already have equity in your home.
Once ordered by your lender, an appraiser visits the property to evaluate its condition, features, upgrades, and compare it to similar homes recently sold in the area. The final report typically includes photos, market data, and a detailed valuation that is sent to both the lender and borrower.
In most cases, the buyer pays for the appraisal as part of the mortgage closing costs. The fee typically ranges between $300 to $600 depending on the property size and location.
Yes, if you believe the appraisal is inaccurate, you can request a reconsideration of value. This often involves providing additional comparable sales or information the appraiser may have missed.
The entire process typically takes between 5 to 10 business days—from scheduling the visit to receiving the final report. This may vary depending on the local market and appraiser availability.
Most mortgage types do require an appraisal, but some refinance programs and government-backed loans may offer appraisal waivers in certain scenarios.
