Woman with measuring tape appraising hone.

Home Appraisal: Everything You Need To Know

Sean Bryant8-Minute Read
February 18, 2021

Buying a home is an exciting experience. However, there are a lot of steps involved in the purchase.

If you’re buying a house with a mortgage, refinancing your current mortgage or selling your home to a noncash buyer, you’ll need to get an appraisal on your property.

A home appraisal is a crucial component of the sale of a home. In order to have a comprehensive understanding of this process, let’s take a closer look at what it entails.

What Is An Appraisal?

Each appraiser will have their own way of completing the process, but many look at the following:

  • The lot and home size, curb appeal, and exterior appearance
  • Extra features that may add value to the property or upgrades/additions
  • The overall quality of the home and construction
  • Structural elements (not as detailed as a home inspector)
  • If the property conforms to the neighborhood (for resale purposes)
  • Other factors that may deter or subtract from the value of the home

After the collection of data, the appraiser will research the housing market and find comparable homes in the area that recently sold.

What Do Home Appraisers Look For?

Each appraiser will have their own way of completing the process, but many look at the following:

  • Lot and home size, curb appeal and exterior appearance
  • Extra features that may add value to the property or upgrades/additions
  • Overall quality of the home and construction
  • Structural elements (not as detailed as a home inspector)
  • If the property conforms to the neighborhood (for resale purposes)
  • Other factors that may deter or subtract from the value of the home

After the collection of data, the appraiser will research the housing market and find comparable homes in the area that recently sold.

How Long Does An Appraisal Take?

How long the in-person inspection part of a home appraisal will take largely depends on the size of the home. If you have a small home, the appraiser might be able to complete the process in less than a half-hour. For large homes, an appraiser may need a few hours.

How long the other parts of the process, including scheduling your appraisal and completing the final report, depends on how busy your appraiser is. If you’re in the middle of the peak buying season, you can bet your appraisal company is fielding an abundance of requests from lenders on behalf of hopeful home buyers like yourself.

COVID-19 has also affected the speed and overall way the appraisal process works. Because new processes need to be followed, the overall appraisal process can take slightly longer to complete. To help, both Fannie Mae and Freddie Mac are allowing what they refer to as desktop appraisals. This allows appraisers to walk the exterior and use a combination of MLS photos and Zoom walkthroughs of the interior.

Once the in-person part is completed, the appraiser will gather data on comparables, which are recently sold homes that are similar to the home being appraised. Then, based on all the information they’ve gathered, they’ll create a report detailing the home and the appraiser’s opinion of the home’s market value.

This process may take a few days to a week, but it could be longer, especially if it’s the busy season in your area.

Who Pays For The Appraisal?

Home buyers will nearly always be responsible for the appraisal of a home. The amount can either be paid upfront or added to the closing costs. During the closing process, buyers will receive a good faith estimate (GFE) from the lender, and this will include the cost of the appraisal.

What Home Buyers Need To Know

If you’re buying a home with a mortgage loan, the appraisal is one of the most important steps toward a successful home closing.

If the appraisal comes in at or above the purchase price agreed to in the contract, the sale can proceed as planned. If the appraisal comes in below that, however, the lender will adjust what it’s willing to give you. After all, the lender doesn’t want to lend more money than what the house is worth.

A low appraisal can put a snag in the home buying process, but it doesn’t have to derail it completely (more on that in a minute).

What Sellers Need To Know

When you’re selling your home, a low appraisal can mean you’ll have to accept less for your home than you originally anticipated.

When it comes to the appraisal, be prepared and proactive. Don’t expect the appraiser to know that you just installed a brand-new, top-of-the-line furnace.

Work with your agent to put together relevant documentation for the appraiser that could help you get a more accurate valuation.

What Refinancers Need To Know

Just as when you first purchased your home, your lender wants to know what your home is valued at when you go through a refinance transaction. The lender wants to make sure you have sufficient equity in your home and that you don’t owe more on the home than what it’s worth.

Refinancers should follow the same advice given to sellers: put your home’s best foot forward for the appraiser by tidying up and preparing documentation of any upgrades that could boost its value.

Tips For Getting A Higher Appraisal Value

When you’re selling or refinancing, you have a vested interest in making sure your home appraises as high as possible.

Though much of the appraisal will be based on hard data that you can’t do much to change – for example, the number of rooms in your home or the sold price of any comparables used – there are some things you can do to ensure that you’re presenting your home in the best light possible and making it easy for the appraiser to find information pertinent to your home’s current value.

Create A List Of Improvements

Before the appraiser arrives, make a list of every improvement you’ve made to the home. List out the work done and the date it was completed. If you can, include receipts and or any applicable permits.

Neighborhood comparables are a big consideration when appraising a home, but when you can show a long list of improvements, it’s likely to look favorable in the appraiser’s final numbers.

Keep in mind, though, that not every improvement is going to be worth something in the eyes of the appraiser, particularly if it only adds aesthetic value, or if it isn’t a permanent addition to the home. A fresh coat of paint isn’t in the same league as, say, a new heating and cooling system.

Explain The Comparables

The appraiser will be able to pull the basic information on the size and price of recently sold homes in your area. What they won’t do is actually enter each home to see the condition. Other than from photos they won’t know if the kitchen was in need of an upgrade or if the flooring was showing some wear and tear.

Before the appraiser arrives, make sure you’ve done your research on the properties that have sold in your area over the past 6 months. If a home sold for less than you’d like yours to appraise for, understand why.

Did it have structural issues or outdated bathrooms? This is the information you’ll want to share with your appraiser so they have a better understanding of why your home should be valued higher.

Spruce Up The Exterior

The outside of your home is the first thing the appraiser is going to see when they arrive. For the most part, the appraisal will involve looking beyond any window dressing, but having a tidy and attractive exterior makes a good first impression and shows the appraiser that you take good care of your home.

If the weather is nice, make sure the grass is nicely mowed, and have a few well-placed flower pots to add some color. You can also put down a fresh layer of mulch to spruce things up.

Give The Appraiser Space

While you might want to follow the appraiser around to make sure they see everything that’s great about your home, smothering them can be a big red flag. It can make it seem like you have something you’re trying to hide.

Instead, when they arrive, you can give them an overview of the home, explain the improvements you’ve made, and talk about the neighborhood. Then let the appraiser do their job.

What To Do If The Appraisal Comes In Low

The last thing any homeowner wants is to have the appraisal come in lower than expected. Luckily, homeowners' assessments typically differ from appraisers by only 1%. If you’re unsure what your home might be worth, start with this home value report.

Unfortunately, not all appraisals are going to go as planned. No matter what side of the transaction you’re on, a low appraisal can be disheartening. But don’t panic. Take stock of the situation and consider your options.

Options For Sellers:

Challenge It

If you believe the appraisal is incorrect or overlooked important factors, you may choose to dispute the appraisal report. However, be prepared to have some data to back up your rebuttal and be realistic.

Reduce the price

While you might not want to reduce the price of your home after you have an interested buyer, it might be necessary. By reducing the price to the appraised value, there shouldn’t be any issues with the buyer’s lender.

Have the buyer make up the difference

If the buyer is still interested, and they think there is enough long term potential in your home, they might agree to come to the closing with cash. They would need to make up the difference between the appraised value and the selling price.

Meet in the middle

If you and the buyer would still like the sale to go through, you can both meet in the middle in terms of the price. You can reduce the asking price slightly and the buyer can bring cash to the closing to make up the difference.

Walk away

If you don’t agree with the appraised price, you can always walk away. You’ll be taking the chance that you’ll find a new buyer, but when you do, their lender might use an appraiser that has a more favorable viewpoint on the value of the home.

Options For Buyers


The buyer can use a low appraisal to negotiate a lower price with the seller. The seller may agree to sell for a price that’s lower than what was originally agreed upon, or they may decide to try their luck back on the market.

How willing a seller is to lower the price will depend on different factors, including how eager they are to complete the sale, how likely they are to find a new buyer if they were to place the home back on the market, and how much they’d have to lower the price. Before going down this road, you should discuss your action plan with your real estate agent.

Walk Away

If the buyer and seller can’t come to an agreement, they may choose to cancel the agreement.

The Bottom Line

Whether you’re buying, selling or refinancing, you need to know the ins and outs of the appraisal process. You don’t need to fear the appraisal, but you do need to prepare for it.

Keep your house in good shape, have documentation on the home available for the appraiser and be ready to be flexible if the appraisal doesn’t come in as expected.

If you’re selling your home, sell with certainty with a Rocket Homes® Partner Agent.

Selling your home?

Work with a real estate agent who knows your local market.

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    Sean Bryant

    Sean Bryant is a Denver based freelance writer specializing in travel, credit cards, and personal finance. With more than 10 years of writing experience, his work has appeared in many of the industries’ top publications.