Home Appraisal - What Home Buyers Need to Know
A clear breakdown of the home appraisal process from your perspective as the buyer — what it is, why it matters, and what to expect:
What is a Home Appraisal?
* An appraisal is an independent, professional estimate of a home's fair market value.
* It protects you (and your lender) from overpaying for a home.
When Does It Happen?
After your offer is accepted and you’re under contract.
Usually happens after the home inspection but before final loan approval.
Why Does It Matter to You as the Buyer?
* The lender won't give you a mortgage for more than the home is worth.
Example:
You agreed to buy the home for $400,000.
Appraisal comes back at $380,000.
Lender will only loan based on $380,000 — not the $400,000 agreed price.
What Happens During the Appraisal?
The lender orders it — you usually pay for it ($400-$700 depending on the area).
A licensed appraiser visits the home (you usually don’t go with them).
They look at:
Condition of the home
Square footage
Upgrades & finishes
Safety or code issues
Recent comparable home sales ("comps") nearby
They send a report back to the lender (and sometimes to you directly).
What If The Appraisal Matches or Exceeds the Purchase Price?
* Great! You move forward as planned.
What If The Appraisal Comes In Low?
You have a few options:
Renegotiate the price with the seller.
Pay the difference out-of-pocket.
Ask the seller to make repairs or upgrades that might boost value.
Challenge the appraisal (rare, but possible).
Walk away (depending on your contract terms).
Final Step: Appraisal Approval
Once the appraisal comes back acceptable to both lender & buyer → you move ahead to final underwriting and then closing.
Quick Tips for Buyers:
Don't stress — most appraisals match or slightly exceed the agreed price, especially in balanced markets.
If you're in a hot market and offered above asking, low appraisals are more common — plan ahead.
Ask your agent to look at recent comps before making your offer to avoid surprises.
