After a house appraisal, the written report reaches your lender within roughly three to ten business days, and the number on it decides your next move: if the appraised value meets or beats the purchase price, you’re two to three weeks from closing; if it falls short, you’ll negotiate, cover the gap in cash, or exercise your appraisal contingency and walk.
When the Report Arrives and How You Get a Copy
Most reports land on the lender’s desk within three to ten business days after the property visit. Complex properties, rural locations, and busy local markets push toward the longer end. For a standard single-family home the appraiser uses Fannie Mae Form 1004, which covers the property’s condition, local market trends, and the recent nearby sales used to estimate value.1Fannie Mae. Uniform Residential Appraisal Report
You are entitled to a copy. Federal law requires your lender to deliver the completed appraisal either promptly after it’s finished or at least three business days before closing, whichever comes first.2Consumer Financial Protection Bureau. 1002.14 Rules on Providing Appraisals and Other Valuations You don’t have to ask for it or pay extra, and the right applies whether you’re approved or denied. If nothing has arrived a few days after the appraisal was ordered, follow up with your loan officer.
What the Lender Does With It
An underwriter reviews the report to confirm the appraised value adequately secures the loan and that the appraisal complies with Fannie Mae or Freddie Mac guidelines.3Fannie Mae. B4-1.3-01, Review of the Appraisal Report They check the comparable sales for relevance, read the condition notes, and look for anything that might affect marketability. A clean report typically clears this stage in a few business days. If the underwriter has questions about the comparables or conditions, they’ll go back to the appraiser and the review stretches longer.
The central number the underwriter calculates is the loan-to-value ratio: your loan amount divided by the appraised value. On a conventional loan, an LTV above 80% requires private mortgage insurance, which adds to your monthly payment.4Fannie Mae. Mortgage Insurance Coverage Requirements The lender always bases this on the appraised value or the purchase price, whichever is lower. If you agreed to pay $400,000 and the home appraises at $410,000, the LTV math still uses $400,000.
If the Value Meets or Exceeds the Purchase Price
This is the clean path. The lender clears the appraisal condition, and assuming everything else checks out, you move toward final approval and what the industry calls “clear to close” — every underwriting condition satisfied, loan ready to fund.
Before you can sign, federal law requires the lender to deliver your Closing Disclosure at least three business days before the closing date.5Consumer Financial Protection Bureau. TILA-RESPA Integrated Disclosure FAQs It shows your final loan terms, monthly payment, and closing costs. Significant last-minute changes, like an inaccurate interest rate or a newly added prepayment penalty, restart the three-day clock. That waiting period is part of why the stretch between appraisal approval and actual closing feels longer than expected.
A value above the price doesn’t increase your loan amount, but it hands you built-in equity on day one. A home you’re buying for $350,000 that appraises at $370,000 starts you with $20,000 in equity, which can help later if you refinance, open a home equity line of credit, or work to drop mortgage insurance earlier.
If the Value Comes in Low
A low appraisal is where deals get complicated. The lender will only lend against the appraised value. If you agreed to pay $400,000 and the home appraises at $380,000, the $20,000 gap is now yours to solve. You have several ways to handle it.
Ask the Seller to Reduce the Price
The most straightforward move is asking the seller to drop the price to match the appraisal. Many sellers agree rather than risk starting over with a new buyer who will face the same problem. Motivation depends on how hot the market is, how long the home has been listed, and whether other offers are waiting.
Cover the Gap in Cash
You can bring the difference to closing yourself. In the example above, that’s an extra $20,000 on top of your down payment and closing costs. This cash doesn’t reduce your mortgage balance or count as down payment; it simply bridges what the lender will finance and what you agreed to pay. Buyers and sellers sometimes split the shortfall.
Use an Appraisal Gap Clause
In competitive markets, some offers include an appraisal gap clause committing the buyer, up to a specific dollar limit, to cover any shortfall. With a $15,000 clause and a $10,000 low appraisal, you bring $10,000 in cash and close at the original price. If the shortfall exceeds your stated limit, you can renegotiate or walk. Buyers who waived this protection during a bidding war are stuck covering the whole gap or finding another solution.
Request a Reconsideration of Value
If you believe the appraisal is genuinely wrong, ask your lender to submit a Reconsideration of Value to the appraiser.6Consumer Financial Protection Bureau. Mortgage Borrowers Can Challenge Inaccurate Appraisals Through the Reconsideration of Value Process You work through your loan officer; you can’t contact the appraiser directly. An ROV can include additional comparable sales the appraiser may have missed, corrections to factual errors like wrong square footage or a missing bathroom, and evidence of relevant improvements. Fannie Mae caps the request at five additional comparable properties.7Fannie Mae. Appraisal Quality Matters
An ROV works best when there’s a clear factual mistake or better comparables the appraiser overlooked. Submitting one because you don’t like the number rarely changes the outcome. The appraiser has no obligation to revise their opinion, and the process typically adds a week or more.
Walk Away Under the Appraisal Contingency
If your purchase contract includes an appraisal contingency and none of the above works, you can terminate the contract and recover your earnest money. The contingency language specifies the deadline for exercising this right, typically somewhere around two to three weeks after the appraisal is completed. Miss that window and you may forfeit the deposit, so watch the dates.
If the Appraiser Flagged Repairs
Sometimes the appraisal comes in at the right value but flags physical problems that must be fixed before closing. This happens most often with FHA and VA loans, which hold properties to stricter standards than conventional mortgages. FHA appraisers follow HUD Handbook 4000.1, which requires working utilities, adequate remaining roof life, safe electrical systems, and no peeling paint in homes built before 1978, among other minimums.
When the appraiser notes required repairs, the report is issued “subject to” those fixes. The seller typically handles the work, though the contract determines who pays. Once it’s done, the lender orders a follow-up visit documented on Form 1004D, which certifies the issues are resolved and the property meets minimum standards.8Fannie Mae. Appraisal Update and/or Completion Report The re-inspection usually costs around $150 and adds another week or two.9Department of Veterans Affairs. VA Appraisal Fee Schedules and Timeliness Requirements
Conventional loans can also require repairs if the appraiser flags something affecting safety or structural integrity, but the bar is generally lower. The lender decides case-by-case whether to require fixes before funding.
How Long the Appraisal Stays Valid
Appraisals expire, and that matters if closing gets delayed. Under Fannie Mae guidelines, the appraisal must be dated within 12 months of your loan’s note date. Older than that, you need a brand-new appraisal.10Fannie Mae. Appraisal Age and Use Requirements If the original report is between four and twelve months old at closing, the lender must order an appraisal update using Form 1004D to confirm the value hasn’t changed.11Fannie Mae. Loan Delivery Job Aids – Appraisal Update
If closing is running on schedule, expiration isn’t a concern. If financing falls through and you switch lenders, or if construction delays push a new-build closing past the four-month mark, expect to pay for an update or a fresh report.
What You Can and Can’t Say to the Appraiser
Federal law makes it illegal for anyone involved in the loan, including the buyer, to pressure an appraiser toward a specific value. You can’t suggest a target number, threaten to withhold payment, or imply future business depends on hitting a certain value.12Office of the Law Revision Counsel. 15 USC 1639e – Appraisal Independence Requirements
You can provide factual information. A list of recent upgrades, comparable sales you know of, and features that might not be obvious (a new HVAC system, a finished basement) are fair game. The law specifically allows asking the appraiser to consider additional comparable properties, provide more explanation, or correct factual errors.12Office of the Law Revision Counsel. 15 USC 1639e – Appraisal Independence Requirements The line runs between sharing facts and pushing for a number.
If You’re Refinancing Instead of Buying
On a refinance, a low appraisal doesn’t blow up a sale; it may shrink the amount your new lender will offer or disqualify you from the program entirely. When the appraised value drops, your LTV rises, and you can fall out of eligibility for the rate or product you wanted.
Your options are narrower. You can submit an ROV through the process above. If the value still isn’t there, you can reduce the amount you’re trying to borrow, pay down existing debt to improve your LTV, or wait for market conditions to shift. In some cases Fannie Mae’s high-LTV refinance programs or Freddie Mac’s enhanced relief refinance help homeowners who owe more than their property is currently worth. There’s no appraisal contingency to invoke because there’s no purchase contract; you walk away from the refinance application having lost only the appraisal fee.