A home appraisal is a licensed professional’s independent opinion of what a property is worth on the open market, and home appraisals are done in a predictable sequence: your lender orders the appraisal, the appraiser researches public records, inspects the property in person, compares it to recent sales of similar homes nearby, and delivers a written report. For a standard single-family home, the fee usually runs $300 to $600, paid by the borrower as part of closing costs. Start to finish, most appraisals take seven to fourteen business days.
Who Orders the Appraisal and Who Pays
You cannot hire your own appraiser for a mortgage. The lender or its Appraisal Management Company selects and assigns one, and federal law makes it illegal for anyone with a financial interest in the transaction to influence the appraiser’s conclusions. That includes withholding payment, asking for a targeted value, or misrepresenting what the property is worth.1Office of the Law Revision Counsel. 15 USC 1639e – Appraisal Independence Requirements
You still pay the fee, though. It appears on your closing cost estimate, and for mortgages tied to federally regulated banks or credit unions, the appraiser must follow the Uniform Standards of Professional Appraisal Practice.2eCFR. 12 CFR Part 225 Subpart G – Appraisal Standards for Federally Related Transactions
Step 1: Research Before the Visit
Before the appraiser sets foot on the property, they pull public records to verify the basics: the legal description on the deed, the lot size, the recorded dimensions of any structures, and the tax assessment history. They also check zoning classifications and any deed restrictions that limit how the property can be used. A home zoned strictly residential will not carry the same value as an otherwise identical property zoned for mixed use.
The appraiser reviews the sales history over recent years, looking for patterns like frequent transfers that sometimes signal distressed sales, or long periods of stable ownership. This desk research shapes what the appraiser expects to find during the physical visit. If tax records show 1,800 square feet but the listing claims 2,200, the appraiser already knows to look for unpermitted additions.
Step 2: The On-Site Inspection
The inspection is methodical but usually takes only 30 to 60 minutes for a typical home. The appraiser measures the exterior using a tape or laser device to calculate the gross living area. Under the ANSI measurement standard now required by most lenders, gross living area includes only above-grade finished space that is heated, accessible, and meets minimum ceiling height requirements, generally at least seven feet through most of the room. Basements, garages, unfinished attics, and detached buildings do not count toward gross living area, even if they have been converted into living space without proper permits.
Inside, the appraiser documents the number of bedrooms and bathrooms, the layout, the flooring, and the quality of kitchen and bathroom finishes. They note the foundation type (slab, crawl space, or full basement), the roofing material and its approximate age, and the condition of major systems such as HVAC, plumbing, and electrical. Permanent improvements that add value get recorded: a finished basement, a built-in outdoor kitchen, a recently added deck. So do red flags like cracked foundations, water stains on ceilings, and sagging rooflines.
The appraiser focuses on what is attached to the property. Furniture, appliances you plan to take with you, and personal belongings do not factor into the value.
Appraisal Versus Home Inspection
These two services get confused constantly. An appraisal answers what the property is worth. A home inspection answers what is wrong with it. The appraiser notes visible defects that affect value but does not crawl through ductwork, test every outlet, or run the dishwasher. A home inspector does all of that and produces a detailed report on plumbing, electrical, HVAC, and structural components, but says nothing about market value. Lenders require an appraisal; a home inspection is optional.
Step 3: Comparing Your Home to Recent Sales
The core of most residential appraisals is the sales comparison approach: finding similar homes that recently sold nearby and using those sale prices to estimate what the subject property is worth. Fannie Mae’s guidelines require the appraiser to analyze closed sales, pending sales, and active listings of the most comparable properties available.3Fannie Mae. B4-1.3-07, Sales Comparison Approach Section of the Appraisal Report
No two houses are identical, so the appraiser makes dollar adjustments to each comparable sale to account for differences. If a nearby home sold for $400,000 but had a garage and yours does not, the appraiser subtracts the estimated value of that garage from the comparable’s sale price. A comparable with an outdated kitchen gets adjusted upward when compared to a subject property with a recent renovation. Adjustments cover square footage, lot size, bedroom and bathroom count, condition, and quality of finishes.
The framework rests on the principle of substitution: a rational buyer will not pay more for a property when an equally desirable alternative is available for less.
Step 4: The Written Report
Everything gets compiled into a standardized document. For most single-family homes financed through conventional mortgages, that is the Uniform Residential Appraisal Report, commonly called Fannie Mae Form 1004.4Fannie Mae. B4-1.2-01, Appraisal Report Forms and Exhibits The report contains the final value estimate, a street map showing the property’s location, a floor plan sketch with dimensions, interior and exterior photographs of the subject property, and exterior photos of each comparable sale. An addendum explains the reasoning behind every dollar adjustment.
The appraiser delivers the completed report to the lender or Appraisal Management Company that ordered it. The lender’s underwriting team then reviews it before making a final loan decision. In high-demand markets or rural areas with few comparable sales, turnaround can stretch to three weeks or more.
A Fannie Mae-compliant appraisal must be completed within 12 months before the date of the mortgage note. If the appraisal is older than that, the lender will require a brand-new one.5Fannie Mae. B4-1.2-04, Appraisal Age and Use Requirements In a fast-moving market, some lenders impose tighter windows internally.
Your Right to Receive a Copy
Federal law entitles you to a copy of the appraisal whether or not the loan goes through. Under Regulation B, which implements the Equal Credit Opportunity Act, the lender must provide a copy either promptly when the appraisal is completed or at least three business days before closing, whichever comes first. You can waive that timing and agree to receive it at closing, but the waiver itself must be signed at least three business days before the closing date. If the deal falls apart, the lender still owes you a copy within 30 days of determining the loan will not close, and cannot charge extra for it beyond the original appraisal fee.6CFPB. 12 CFR 1002.14 – Rules on Providing Appraisals and Other Valuations
Preparing Your Home for the Appraiser
You cannot control the local market, but you can make sure the appraiser sees your home at its best.
- Make every area accessible. Unlock the attic hatch, clear a path to the basement, and move anything blocking crawl space access. Areas the appraiser cannot reach get noted as inaccessible, which does not help your value.
- Document your improvements. Compile a list of upgrades with approximate dates and costs: a new roof, a kitchen remodel, replacement windows. If you pulled permits, have copies available. Permitted improvements carry more weight than unpermitted ones.
- Handle minor repairs. A dripping faucet or a cracked tile will not tank your value, but visible deferred maintenance creates a general impression of neglect that can nudge a condition rating downward.
- Tend to the exterior. Mow the lawn, trim hedges, and clean up anything that detracts from curb appeal. The appraiser photographs the front of your home, and that photo becomes part of the permanent record.
None of this will fundamentally change the number. Comparable sales data drives it. But removing distractions and presenting clear documentation helps the appraiser capture the full picture accurately.
If the Appraisal Comes in Low
If the appraised value falls below the agreed purchase price, the lender will not finance the gap. Buyers who included an appraisal contingency in the purchase agreement have three options:
- Ask the seller to reduce the price to the appraised value. Many sellers will consider it rather than restart the selling process.
- Cover the gap with cash at closing.
- Walk away. An appraisal contingency lets you cancel the contract and get your earnest money back.
Without an appraisal contingency, your choices shrink to paying the difference or walking away and forfeiting the deposit.
Requesting a Reconsideration of Value
If you believe the appraisal missed something, you can ask your lender to submit a formal Reconsideration of Value. Federal interagency guidance issued in 2024 establishes that lenders should have clear processes for borrowers to raise valuation concerns early enough to resolve them before a final credit decision.7Federal Register. Interagency Guidance on Reconsiderations of Value of Residential Real Estate Valuations
A reconsideration request needs specific, verifiable data the appraiser may not have considered: comparable sales that were not included, property features that were incorrectly reported, or recent improvements that were overlooked. For each comparable you suggest, provide the address, sale price, sale date, square footage, and any listing details. Vague complaints about the number do not go anywhere. Appraisers respond to data.
When the Process Looks Different
The full-inspection appraisal above is the standard, but two situations change it. FHA and VA loans layer minimum property requirements on top of the market valuation, so the appraiser also checks for safety and livability issues such as peeling paint in older homes, missing handrails, exposed wiring, or inadequate access to the property. Repairs may be required before the loan can close.8VA. VA Pamphlet VAP26-7, Chapter 12 – Minimum Property Requirement Overview
Some conventional loans skip a full appraisal entirely. In a hybrid appraisal, a trained third party conducts the physical inspection while the licensed appraiser completes the valuation remotely.9Fannie Mae. B4-1.2-03, Hybrid Appraisals In other cases, Fannie Mae’s automated underwriting system will offer a value acceptance, meaning no appraisal is required at all; the system confirms the value using its own property data.10Fannie Mae. B4-1.4-10, Value Acceptance A waiver saves you the fee and can shave a week off closing. The trade-off is that you lose an independent check on whether you are overpaying.