What to Expect During a Home Appraisal (And How to Prepare)

A home appraisal is one of the most misunderstood steps in the home buying — or selling — process. Most buyers know it happens, but few understand what the appraiser is actually doing, what can cause problems, or what happens when the number comes back wrong.

Whether you're a buyer waiting anxiously for the report, or a seller trying to prep your home for maximum value, this guide covers what you actually need to know.

What Is a Home Appraisal?

A home appraisal is an independent, professional assessment of a property's fair market value. It's conducted by a licensed or certified appraiser — an independent third party hired by your lender, not by you or the seller.

The lender requires an appraisal because they're taking on significant financial risk. If you stop paying your mortgage and they have to foreclose, they need to know the home is worth at least what they lent you. They will not lend more than the appraised value.

The appraisal is separate from the home inspection. The inspection identifies physical problems. The appraisal determines value. Both happen during the due diligence period, typically 1–3 weeks after your offer is accepted.

What a full appraisal covers: A complete (full) appraisal includes an in-person visit by the appraiser to measure and photograph the property, followed by a written report comparing the home to recent comparable sales. This is the standard appraisal for purchase transactions.

How the Appraisal Process Works

Step 1: The lender orders the appraisal. You usually pay for it ($400–$750 is typical; in some markets and for complex properties, it can exceed $1,000). This fee is often paid upfront when you lock your loan, or it shows up in closing costs.

Step 2: The appraiser schedules and visits. The visit typically takes 30–90 minutes depending on the property size. They will:

• Measure the home's square footage (they measure themselves — MLS listings are sometimes wrong)
• Photograph every room, the exterior, and any notable features or defects
• Assess the condition of major systems (roof, HVAC, foundation, plumbing) at a surface level (they are not inspectors — they note obvious issues but don't do a deep technical inspection)
• Evaluate the neighborhood, location, and any factors that affect market value

Step 3: The appraiser selects comparable sales. The core of the appraisal is the "comps" analysis — recent sales of similar homes in the same area. The appraiser typically selects 3–6 comparable properties and adjusts the value up or down based on differences (e.g., your home has a garage and the comp doesn't — add value).

Step 4: The appraiser writes and submits the report. The written report (typically a URAR — Uniform Residential Appraisal Report) is submitted to the lender within 3–10 days. The lender reviews it and shares it with you.

Step 5: You receive the appraisal. As a borrower, you have the legal right to receive a copy of the appraisal at least 3 business days before closing. In practice, your lender usually shares it sooner.

What Happens During the Appraiser's Visit

The appraiser is not a home inspector — they're not crawling through your crawlspace or pulling off outlet covers. But they will look at:

• The overall condition and any obvious deferred maintenance
• The size and layout of rooms
• The quality of finishes (flooring, kitchen, bathrooms)
• Whether the home is functional: working heat, electricity, plumbing, kitchen, bathroom
• Health and safety items — particularly for FHA and VA loans (more on this below)
• Lot size and usable outdoor space
• Parking (garage, carport, street)
• Any additions or improvements, and whether they appear to have permits

The visit itself is usually low-key. You don't need to be present, but it can be useful to be available to answer questions.

Things That Can Hurt a Home Appraisal

Deferred maintenance and obvious condition issues:

• Peeling paint (especially on older homes where lead paint may be a concern)
• Missing or damaged gutters, downspouts
• Cracked or damaged foundation elements
• Roof in poor condition
• Non-functioning systems (HVAC that doesn't turn on, plumbing fixtures that don't work)
• Water damage or evidence of moisture intrusion

Safety concerns (especially critical for FHA and VA loans): FHA and VA loans have stricter property condition requirements than conventional loans. The appraiser must flag:

• Exposed electrical wiring
• Missing handrails on stairs
• Broken windows
• Evidence of structural issues
• Health hazards (peeling paint in pre-1978 homes, active leaks)

If any of these conditions exist, the lender may require them to be corrected before the loan can close. This is a common source of delays.

Poor comparable sales data: If there have been few recent sales in the area, or if comparable homes have sold at lower prices (due to foreclosures, distressed sales, or market softening), your appraised value may come in below what you and the seller agreed to.

Overpriced relative to the market: An appraiser won't just rubber-stamp the agreed purchase price. If the comps don't support the price you're paying, the appraisal will reflect reality — not the agreed number.

Unpermitted additions: A finished basement or room addition that was done without permits may not count in the square footage — which can significantly affect value.

What Adds Value to a Home Appraisal

Recent upgrades to high-value systems:

• A new roof (1–5 years old) significantly reduces perceived risk
• Updated HVAC system
• Updated electrical panel (especially replacing a Federal Pacific or Zinsco panel)
• Updated plumbing

Kitchen and bathroom updates: These are the highest-return improvements in terms of appraised value. Granite countertops, new cabinets, and modern fixtures add measurable value — though the return varies by market.

Square footage and functional layout: Finished square footage matters more than raw footprint. A home with an unfinished basement is worth less than a comparable home with a finished basement.

Curb appeal: It's not purely cosmetic — a well-maintained exterior signals to the appraiser that the home has been cared for overall. Fresh landscaping, clean gutters, and a tidy yard all make a positive impression.

Garage: An attached garage adds more value than a detached one, which adds more than no garage. In most markets, this is a meaningful value driver.

Location factors: Proximity to good schools, low crime, walkability scores, and quiet streets all factor into value — and there's nothing you can do about these after purchase. They're priced in from day one.

VA Home Appraisal: What's Different

VA appraisals follow Minimum Property Requirements (MPRs) set by the Department of Veterans Affairs. The appraiser must confirm the home:

• Is safe: No hazards that threaten the health or safety of occupants
• Is structurally sound: Foundation, roof, and walls are in acceptable condition
• Is sanitary: Adequate water supply, working plumbing, functioning sewage system

Common VA appraisal issues:

• Peeling paint (in homes built before 1978, this must be tested or remediated)
• Missing smoke detectors
• Non-functioning appliances included in the sale
• Roof with less than 2 years of remaining useful life
• Crawlspace or attic access blocked
• Evidence of pest infestation

If the home doesn't meet MPRs, the seller must correct the issues before the loan can close. This makes VA buyers slightly less competitive in some markets where sellers don't want the added conditions.

VA appraisal vs. conventional appraisal: The process is similar, but a VA appraiser uses a specific form (VA Form 26-1805) and applies the MPR requirements. VA appraisers are assigned by the VA, not chosen by the lender.

What Happens If the Appraisal Comes In Low

This is the scenario every buyer dreads. You agreed to pay $430,000, and the appraisal comes back at $410,000. The lender will only lend based on the lower number.

Your options:

1. Negotiate with the seller. Ask them to reduce the price to the appraised value. Many sellers will, especially if the property has been on the market for a while. If the seller is highly motivated (relocating, under financial pressure), they often have more flexibility than they initially show.

2. Pay the appraisal gap. You come up with the $20,000 difference yourself, in addition to your down payment. This is only viable if you have the cash and are confident in the purchase. "Appraisal gap coverage" has become a standard clause in competitive markets where buyers agree upfront to cover a gap up to a certain amount.

3. Challenge the appraisal (Reconsideration of Value / ROV). If you believe the appraiser missed recent comps or made a factual error, you can request a reconsideration of value through your lender. Your agent can help identify comps the appraiser may have overlooked. This process takes 1–2 weeks and has mixed success — appraisers may adjust, or they may decline.

4. Exit the contract. If you have an appraisal contingency in your contract and the property doesn't appraise at the purchase price, you can exit and receive your earnest money back. This is the safety net the contingency is designed for.

Appraisal Review Checklist for Buyers

When you receive the appraisal report, review these items before accepting it:

• [ ] Is the square footage correct? Compare to the listing and tax records
• [ ] Are all rooms and features accurately described?
• [ ] Are the comparable sales recent (ideally within 6 months) and genuinely similar to the subject property?
• [ ] Are the comps in a comparable location and neighborhood?
• [ ] Are there any adjustments that seem incorrect or missing? (e.g., your home has a garage and the comp doesn't — was a garage adjustment made?)
• [ ] Is the condition rating fair and consistent with the inspection report?
• [ ] Are any unpermitted additions listed as finished square footage?
• [ ] Are there any FHA/VA condition flags that will require remediation?

If you find errors or questionable comps, provide this analysis to your lender in writing as the basis for a reconsideration of value request.

A Word on the Appraisal Waiver

In some purchase transactions, particularly with conventional loans and strong borrower profiles, lenders may offer an "appraisal waiver" — relying on automated valuation models (AVM) rather than ordering a physical appraisal. This saves you $400–$750 and 1–2 weeks.

However, if you're a buyer waiving the appraisal, you're also accepting the risk that you may be overpaying. In a stable market with clear comps, this risk is low. In a volatile or thin market, it's a more significant exposure.

Get the Full Picture on Your Home Purchase

The appraisal is just one of many moving parts in the home buying process. Missing a deadline, misunderstanding a contingency, or overlooking a condition issue can cost you thousands — or the deal itself.

The Complete First-Time Homebuyer Checklist includes an appraisal review checklist, a contingency deadline tracker, and a complete walkthrough of every stage from pre-approval to closing. It's a $14 PDF toolkit designed for buyers who don't want to rely on their agent to track everything for them.

Download it here: firsthometoolkit.com/homebuyer-checklist/