A home appraisal is a licensed professional’s independent estimate of a property’s market value, used by mortgage lenders to confirm the home is worth the loan amount before they approve financing.
When you buy a home or refinance, your lender needs to know that the property is worth the money they are giving you. That's when the appraisal comes in. A state-licensed or state-certified appraiser goes to the property, checks its condition, measures the square footage, and then compares it to other homes that have sold recently in the same area. The end result is a written report that includes the appraiser's professional opinion on how much the house is worth on the open market.
This step keeps you safe as well as the lender. Think of it as a way to check how much it really costs. If you pay $350,000 for a house but the appraisal says it's only worth $320,000, the loan you get will be bigger than the house itself. That can make things hard for you right away.
The Consumer Financial Protection Bureau says that you can get a free copy of your appraisal for any first-lien mortgage. Your lender has to give it to you at least three business days before closing, and they can't charge you more for it. I always tell buyers to read that report carefully because it's one of the few times during the process that someone else is looking out for their best interests.
Appraisers don’t just walk through your house and guess at a number. They follow a pretty structured process that’s grounded in the Uniform Standards of Professional Appraisal Practice, which is the national rulebook for the appraisal profession. The Appraisal Foundation has maintained these standards since Congress authorized them back in 1989, and every licensed appraiser has to follow them.
Inside the home, an appraiser looks at room count, square footage, overall condition, and any upgrades like a remodeled kitchen or new HVAC system. They’ll note the age of the roof, the state of the plumbing and electrical, and whether there are any obvious issues like water damage or foundation cracks. Outside, they check the lot size, landscaping, driveway, and the general look of the neighborhood.
The biggest piece of the puzzle, though, is comparable sales. Appraisers pull data on homes with similar features that sold within the past six to twelve months in the same area. If three houses on your street with the same layout sold for around $325,000, that’s a strong signal of where your property’s value sits. When comparable sales are hard to find, like in rural markets, the appraiser has to cast a wider net, and that can sometimes lead to less precise valuations.
Your lender orders the appraisal once your loan application is moving forward. Under federal rules, neither you nor the seller gets to pick the appraiser. Most lenders work through an Appraisal Management Company, or AMC, which assigns an independent appraiser. This separation exists to keep the appraisal honest. AmeriSave follows the same process, making sure your appraisal comes from someone with no stake in the deal.
For a standard purchase loan, the appraiser shows up in person, walks through the home, takes measurements and photos, and inspects the property’s condition inside and out. This visit can take anywhere from thirty minutes to a couple of hours, depending on the size and complexity of the house. After the visit, the appraiser heads back to do their research, pulling comparable sales and putting together the final report. From start to finish, the whole thing usually takes about one to three weeks.
Not every appraisal requires a full interior inspection. A drive-by appraisal only looks at the exterior and relies on public records for the rest. Desktop appraisals skip the visit entirely and use existing data, photos, and records to estimate value. These lighter options show up more often in refinance situations or when the lender considers the loan lower risk. If you’re using an FHA or VA loan, though, expect a more thorough inspection because those programs have stricter property standards the home has to meet.
For a standard single-family home, most buyers pay somewhere between $300 and $500. The national average sits around $350 to $425, according to industry data from home services platforms like Angi. Where you live makes a real difference. In places like Kentucky or Georgia, an appraisal might run closer to $300. In higher-cost states like New Jersey or Washington, you could pay close to $600.
FHA and VA appraisals tend to cost a bit more because the appraiser has to check for additional safety and livability standards on top of the normal valuation work. A condo appraisal can land between $400 and $750 since the appraiser needs to look at the whole building’s condition and association finances, not just your unit. Multi-family properties and large estates push costs even higher, sometimes past $1,000. If the appraiser has to travel a long distance to reach a rural property, expect a surcharge for that too. AmeriSave can walk you through these costs early in the process so you know what to budget for.
A low appraisal doesn’t have to be a deal-breaker, but it does change the math. I’ve worked with plenty of buyers in the DFW market who’ve faced this, and there are a few paths forward.
Let’s say you’re under contract at $350,000, and the appraisal comes back at $330,000. Your lender can only base the loan on $330,000, so now there’s a $20,000 gap. If you’re putting 10% down, here’s how the numbers shift. With the original price, your down payment would be $35,000 and your loan $315,000. After the low appraisal, the lender will lend up to $297,000, which means you need $53,000 to close instead of $35,000. That extra $18,000 has to come from somewhere.
Your first option is to renegotiate the purchase price. If the seller is motivated, they may agree to drop down to the appraised value or split the difference. Your second option is to bring cash to cover the gap yourself. Some buyers in competitive markets do this because they believe the home is worth it even if the appraisal disagrees. Your third option is to walk away. If you have an appraisal contingency written into your contract, you can back out without losing your earnest money.
You can also ask your lender to request a reconsideration of value. The FDIC recommends gathering proof that the appraisal missed something, like a recent comparable sale the appraiser didn’t use, or upgrades that weren’t reflected in the report. This won’t always change the number, but it’s worth trying.
A little planning can help a lot, whether you're selling your house or refinancing. The appraiser wants to see a property that is in good shape, so start with the basics. Pick up the trash in the yard. Check that the outside looks good. Fix anything that is obviously broken, such as a window that is cracked or a faucet that is leaking.
You don't have to stage the house like you would for a showing, but everything should be easy to get to. The appraiser needs to see every room, the attic if there is one, and the garage. Make a list of any improvements you've made to the property since you bought it. The appraiser might not notice a new roof, an updated kitchen, or a finished basement without proof.
Keep in mind that there are a lot of rules that appraisers have to follow. They have to be fair and can't have any financial stake in whether the deal goes through. You can be nice and answer their questions, but trying to change the outcome won't work and could even make things worse. Just make it easy to judge the property and let things happen as they should. AmeriSave can help you understand what to expect from the appraisal step so you won't be surprised.
One of the steps in getting a mortgage that is easy to forget about until it matters is getting an appraisal of the home. The independent check makes sure that everyone is using the real value of the property and not just what the seller is asking for or what you are willing to pay. When you get your appraisal report, read it carefully and ask questions if something doesn't seem right. If the number is lower than you thought, make sure you know what your options are. AmeriSave can help you understand how the appraisal fits into the bigger picture and keep things moving if you're getting ready to buy or refinance.
It can take anywhere from 30 minutes to a couple of hours to visit the property, depending on how big and complicated the home is. The appraiser then needs time to look up sales that are similar and write the report. The time between when you order the appraisal and when the final report gets to your lender's desk is about one to three weeks. It might take longer if appraisers in your area are busy. Talk to your AmeriSave loan officer early on so you can make a plan for when things will happen.
If you're the buyer, you might be able to go, but it depends on what the seller wants and what your agent says. Most appraisers like to work alone because they need to be able to do their jobs without anyone watching them. If you're the homeowner getting a refinance appraisal, you'll probably be home when the appraiser comes and can answer questions about the house. No matter what, don't try to change the outcome. The AmeriSave team can tell you what to expect from your loan type.
An appraisal looks at how much the house is worth on the market. An inspection looks at the home's physical state. The lender hired the appraiser to make sure the property is worth the loan amount. The inspector is on your side and will point out any problems that need to be fixed, such as a bad roof, old wiring, or water damage that isn't visible. You can do both, and you should in most cases. When you buy a home, AmeriSave says you should do both steps so you know how much you're paying and what condition the property is in.
The lender will decide. Some lenders charge you the appraisal fee when you order it, while others add it to your closing costs so you pay it at the end. You are the one who has to pay for it, no matter what. The homeowner pays the fee for a refinance. In some buyers' markets, you might be able to get the seller to pay for things like the appraisal fee. You can use AmeriSave's mortgage calculator to figure out how much your closing costs will be, including the appraisal fee.
If the appraisal comes in below the agreed-upon price, an appraisal contingency in your purchase contract lets you back out of the deal or renegotiate. Without this clause, you might have to pay the full price of the purchase even if the lender won't cover the gap. Most real estate agents say you should include one, especially in hot markets where bidding wars can drive prices up higher than what homes are actually worth. The AmeriSave resource hub has more information about closing costs and contingencies.
You can ask your lender for something called a "reconsideration of value." You will need to back it up with proof, such as sales that are similar to yours that the appraiser may have missed or records of upgrades that weren't counted. Your lender sends this to the appraiser or AMC to look over. There is no guarantee that the value will change, but it happens more often than you might think, especially if the original report left out something important. The AmeriSave loan team can help you with the reconsideration process.
An appraisal waiver skips the step of having an appraiser come to your home and uses data that is already available to figure out how much the home is worth. It can save you time and money, but there is a risk involved. You might not find out about problems with the house or that it's too expensive for the neighborhood until it's too late. Waivers are more common when the lender already has information about the property and is refinancing. An appraisal gives you an unbiased look at what you're buying, which is especially helpful if you're buying your first home. While you wait for your preapproval, you can start looking at homes that fit your budget with ComeHome by AmeriSave.
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