Your lender requires an appraisal to confirm the home is worth the purchase price. Here is the complete process — what appraisers look for, how long it takes, and what to do if the value comes in low.
Your lender requires an appraisal to confirm the home is worth the purchase price. Here is the complete process — what appraisers look for, how long it takes, and what to do if the value comes in low.
What Is a Home Appraisal?
A home appraisal is an independent professional estimate of a property's market value, conducted by a licensed appraiser. Mortgage lenders require appraisals to ensure they're not lending more than the property is worth — protecting both the lender and (to some extent) the buyer from overpaying.
The Appraisal Process
Lender orders the appraisal — Through an Appraisal Management Company (AMC); takes 3–10 days to schedule
Appraiser visits the property — Typically 30–60 minutes; inspects interior, exterior, measurements, condition, features
Appraiser researches comparable sales ("comps") — Recent sales of similar homes within 1 mile in similar neighborhoods
Appraisal report is completed — 5–10 business days after property visit
Report delivered to lender — You receive a copy; lender uses appraised value in underwriting
What Appraisers Evaluate
Location: Neighborhood quality, proximity to amenities, flood zone
Property characteristics: Square footage, bedroom/bathroom count, lot size, age, condition
Comparable sales: 3+ recent sales of similar properties within 1 mile (typically within 6 months)
Market conditions: Whether it's a buyer's or seller's market
Single-family home appraisals typically cost $400–$700, paid by the buyer upfront (non-refundable). Multi-unit properties and complex homes cost more ($700–$1,500). The appraisal fee is collected by the lender at application or before the appointment is scheduled.
What Happens If the Appraisal Comes In Low?
A low appraisal (below the purchase price) is a serious issue because lenders will only lend based on the appraised value. Options:
Renegotiate the price — Ask seller to reduce to appraised value. Sellers often agree rather than start over.
Pay the gap — Buyer covers difference between appraised value and purchase price in cash (appraisal gap coverage)
Challenge the appraisal — Submit comparable sales the appraiser may have missed; request reconsideration of value (ROV)
Order a second appraisal — Some loan types allow this; additional cost; no guarantee of higher value
Walk away — Use the appraisal contingency to exit with full earnest money return
Frequently Asked Questions
The appraisal process typically takes 1–2 weeks total: 3–10 days to schedule the appointment, 30–60 minutes for the property visit, and 5–10 business days to complete and deliver the report. In high-demand markets with appraiser shortages, the process may take 2–3 weeks. Rush appraisals are available for additional fees.
Buyers can order a private appraisal for their own information, but it won't satisfy the lender's requirement. Lenders must use an approved appraiser through an AMC (Appraisal Management Company) to comply with FIRREA regulations. A private appraisal costs the same but only serves to give you information — it can't be used by the lender.
Disclaimer: Smart Mortgage Guide provides educational content only. We are not a licensed mortgage lender, broker, or financial advisor. Rates, limits, and program details are subject to change. Always consult with a licensed mortgage professional before making financial decisions.