Key Takeaways
Why a Professional Appraisal Differs From Other Valuations
When most people want a quick sense of what their home is worth, they turn to online estimator tools. But as covered in our guide to online home value estimators, those automated figures can vary widely from reality. A professional appraisal is a different standard entirely: it is a formal, documented opinion of value produced by a licensed or certified appraiser who physically visits the property.
Lenders require this level of rigor because mortgage loans are secured by the property itself. If the appraised value comes in lower than the agreed sale price, the lender will not finance the difference — which is why understanding the process matters well before closing day. For a broader look at how appraised value relates to market value and tax-assessed value, see our article on the difference between appraised, market, and assessed values.
Know the Difference Before the Process Starts
First-time buyers sometimes confuse the appraisal with the home inspection, but they serve very different purposes. The appraisal determines value for the lender; the inspection evaluates physical condition for the buyer. Our guide to what happens during a home inspection explains what inspectors look for and how to use their findings.
Who Orders It, Who Pays, and When It Happens
In a standard home purchase transaction, the buyer's lender orders the appraisal after a purchase agreement is signed. Even though the lender initiates the process, federal regulations under the Dodd-Frank Act generally require that the buyer pays the appraisal fee — typically ranging from around $300 to $600 for a single-family home, though costs vary by location and property complexity.
Appraisals are also ordered during refinancing, when a homeowner wants to replace an existing mortgage with a new one, often to secure a lower interest rate or access home equity. In either scenario, the appraiser is selected through an independent process designed to prevent undue influence from any party with a financial stake in the outcome.
Homeowners who want a valuation for personal planning purposes — estate planning, divorce proceedings, or a private sale — can hire an appraiser directly. This is called a private appraisal and follows the same professional standards, though the report is not automatically accepted by a lender for mortgage purposes.
What Happens During the On-Site Visit
The physical inspection portion of an appraisal typically takes between 30 minutes and a few hours, depending on the size and complexity of the property. The appraiser is examining factors that directly influence value — many of which are explained in depth in our article on what actually determines your home's value.
Prepare the Property Before the Appraiser Arrives
Tidy the home and address any minor, visible maintenance issues — a broken window latch, a dripping faucet, or missing light switch covers. Appraisers note the property's overall condition, and deferred maintenance can negatively affect the final value. You do not need to renovate; the goal is to present the home accurately and well.
- Clean and declutter interior spaces so the appraiser can measure rooms clearly.
- Ensure all areas of the home are accessible, including the attic, basement, and any outbuildings.
- Gather documentation of recent improvements: permits, contractor invoices, and warranty records.
Be Present — But Let the Appraiser Work
Homeowners are permitted to be present during the visit and can briefly point out improvements or features the appraiser might otherwise miss. However, avoid following the appraiser from room to room or attempting to influence their opinion. Their professional independence is a regulatory requirement, and the valuation must reflect objective analysis.
Review the Comparable Sales the Appraiser Selected
When you receive the report, examine the comparable sales the appraiser used. Comps should be similar in size, age, condition, and location — typically within one mile and sold within the past six months. If you believe a key comp was overlooked or that an adjustment was applied incorrectly, document your reasoning carefully before pursuing a reconsideration of value.
Submit a Reconsideration of Value If Warranted
If you have concrete evidence — not just a preference for a higher number — that the appraisal contains errors or omissions, ask your lender to initiate a formal reconsideration of value. This process involves submitting additional comparable sales or correcting factual errors in the report. The original appraiser reviews the new evidence and may revise their conclusion, though they are not required to do so.
After the visit, the appraiser returns to their office to complete the written report, which usually takes several business days. The most common format is the Uniform Residential Appraisal Report (URAR), a standardized form accepted by Fannie Mae and Freddie Mac for conventional loans.
How to Read the Report and What Comes Next
The completed appraisal report includes the appraiser's concluded value, a description of the property, an analysis of three to five comparable sales (called comps), and any conditions or repairs that affected the valuation. Lenders are required to share a copy with the buyer at least three business days before closing.
If the appraisal comes in at or above the purchase price, the transaction generally proceeds. If it comes in below the purchase price — a situation commonly called an appraisal gap — buyers, sellers, and lenders must negotiate a resolution. Options typically include renegotiating the sale price, the buyer covering the gap in cash, or challenging the appraisal through a formal reconsideration of value (ROV) process. An ROV is a written request, supported by evidence such as overlooked comparable sales, submitted to the lender for review.
For context on how appraised and market values interact — and what it means when they diverge — see our piece on appraised value vs. market value. And if you are navigating this as part of a broader purchase, our step-by-step homebuying guide places the appraisal in the full transaction context.