A home appraisal is a professional evaluation conducted by a licensed appraiser to determine a property’s fair market value. It is typically required by lenders when someone is using a mortgage to purchase or refinance a home, ensuring the lender doesn’t loan more than the property is worth.

The Appraisal Process

The process follows these key steps:

1. Lender orders the appraisal – After your offer is accepted and purchase agreement signed (or after applying for a refinance), the lender orders an appraisal through an appraisal management company or individual appraiser.
2. Appraiser visits the property – A licensed appraiser conducts an in-person inspection lasting 30 minutes to a few hours depending on the home’s size. They measure the home, draw a floor plan, take photos of each room, and make extensive notes.
3. Appraiser reviews comparable sales – The appraiser researches recently sold similar properties (“comps”) in the area and analyzes public records to compare values.
4. Appraiser delivers the report – A final report, typically the Uniform Residential Appraisal Report, is submitted to the lender, and borrowers are entitled to a free copy before closing.

What Appraisers Evaluate

Appraisers consider numerous factors when determining value:

• Structure and condition – Foundation, roof, walls, HVAC system, and overall structural soundness
• Size and layout – Square footage, number of bedrooms and bathrooms, lot size
• Location – Neighborhood characteristics, school district, proximity to transportation
• Amenities – Features like fireplaces, pools, decks, or recent renovations
• Market data – Sales trends and price ranges for comparable homes nearby

Cost and Payment A home appraisal typically costs between $300 and $450, though fees can vary based on the home’s size, condition, and location. The borrower generally pays this fee, which is included in the closing disclosure document. Rural or unique properties may cost more to appraise due to fewer direct comparisons available.