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What Is A Home Appraisal, And How Much Does It Cost?

Hanna Kielar9-minute read

March 23, 2023


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Whether you’re looking to buy a house, sell or refinance, a home appraisal is likely going to be an important part of the process. After all, you have to know how much a house is worth before you can make any meaningful financial moves on it.

The appraisal process can be a nerve-wracking one, especially if you aren’t sure what all goes into it. Let’s take a look at what appraisals are, how they work and how much you can expect one to cost.

What Is A Home Appraisal?

A home appraisal is a process through which a real estate appraiser determines the fair market value of a home. It can assure you and your lender that the price you’ve agreed to pay for a home is fair. Appraisals are also often used to determine property taxes, which makes them a requirement in most counties.

If you need a mortgage to buy a home, your real estate agent will likely suggest that you include an appraisal contingency in the sales contract. The appraisal contingency lets you walk away from a home purchase if the appraisal comes in too low to justify the agreed-upon purchase price.

While necessary in most cases, appraisals aren’t required. You may want to skip the contingency if you’re buying a home with cash or if you’re in a seller’s market. However, it makes a lot of sense if you’re buying your first home or if you’re on a tight budget. It also protects you from paying too much for a house that’s worth less than it’s being sold for.

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Home Appraisal Vs. Home Inspection

An appraisal differs from a home inspection, which is a much more in-depth process. In a home inspection, an inspector specifically looks for problems in the home and determines whether certain areas need repairs. An inspector may test outlets, run the home’s furnace to see if it can hold a stable temperature and look at the roof to see if it’s been properly installed.

A home appraiser will take visible defects into account, such as a roof that’s caved in or the fact that the home doesn’t have a working plumbing system, but they do not search for specific problems. Instead, the appraiser mainly looks for an overall value to assign to the property without digging for deeper issues.

Other Types Of House Appraisals

Besides the traditional in-person appointment, your lender may schedule a different type of appraisal, depending on your situation. Over the last few years, technology has made it easier to assess a home’s value without physically inspecting it. Here are a few different ways the appraiser might evaluate your home: 

  • Hybrid appraisal: A hybrid appraisal combines a virtual and in-person visit. The appraiser will use photographs from the listing or home inspection to view the property. They’ll also hire a local professional to gather additional information on the home, like taking measurements of the rooms or checking specific features. 
  • Desktop appraisal: Like it sounds, a desktop appraisal is simply done from the appraiser’s computer. They’ll only use public records, floor plans of the house and real estate comps to get the information they need. These appraisals have become more popular among lenders as the appraiser never has to leave their office to complete the report, which means a shorter waiting period. 

Drive-by appraisal: Some lenders may even use a drive-by appraisal for qualifying borrowers. This type of appraisal is especially common for FHA and VA lenders, who have started accepting exterior-only assessments since the COVID-19 pandemic. 

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What Do Home Appraisers Look For?

A licensed appraiser is hired by your lender to act as a third party that will independently assess your home and determine its value. That way, both you and your lender know that the appraisal has been created without bias towards either party.  

Appraisers also have a specific set of factors they use when creating the appraisal. The three most important aspects that are evaluated include:  

  • Living condition of the home: Unlike a home inspector, the appraiser isn’t looking for specific faults or issues. Instead, they’ll be assessing the general condition of the property. The appraiser will count the number of bedrooms, make sure there are no safety hazards present and check the functionality of home systems. Their primary focus is to determine if your home is livable, and if it is deemed unsafe, your house’s appraisal value could be much lower than expected. 

  • Home improvements: If you’ve completed any upgrades or renovations to your house, the appraiser will consider them, but only if they’re permanent fixtures. For an improvement to increase the value of your home, the upgrade will need to be left behind when you move. Otherwise, the appraiser will not include it in their evaluation. The appraiser will also check for any upgrades you’ve made outside of the main living areas, for example, if you’ve renovated your garage, finished your basement or landscaped around your pool. 

  • Nearby home values: Your home isn’t the only one considered when the appraisal is created. A licensed appraiser will make sure to include a brief analysis of similar properties that are located close to your home. They’ll check what these other houses sold for and their current property values to help them find an appropriate dollar amount for your home.

After the appraiser finishes their research, they make a final valuation of the property in a formal report. The appraiser then delivers that report to your mortgage lender.

How Much Does A Home Appraisal Cost (And Who Pays)?

A home appraisal can cost anywhere between $600 – $2,000. You'll pay less for a single-family appraisal than a multifamily one.

Even though most lenders require an appraisal as a condition of a loan closing, the buyer pays for the appraisal unless they negotiate for the seller to pay instead. The amount that a buyer pays for an appraisal depends on a number of factors, including the size of the home, the home’s location and the amount of property research that the appraiser ends up doing before they issue a final value report.

Keep in mind that if the property is on a very large plot of land, the appraisal cost will be more because the appraiser often surveys the boundary lines of the property to make sure that the listed square acreage is correct.

Buyers can also expect to pay a higher appraisal fee in a very rural area simply because there are fewer appraisers working in these areas. This might mean a longer wait for an appraisal as well. If you have any questions about how much your appraisal will cost, consult with your mortgage lender.

How Long Does A Home Appraisal Take?

There are many factors that determine how long an appraisal takes including the type of appraisal ordered by your lender, and the laws of the state where you live. The home appraisal process can take anywhere from several weeks to a few days from start to finish.

The inspection itself can last 15 minutes to several hours, although, as noted above, those longer physical inspections have become less common since the start of the pandemic. It’s a bit too soon to say whether the technology embraced during the pandemic is here to stay, but it seems likely that tech will continue to speed up this leg of the home buying process.

Home Appraisal Tips For Buyers

Home appraisals can affect the selling price and mortgage amount for a home. An appraised value that doesn’t match your purchase price could mean trouble. If the house appraises for less than you’ve agreed to pay, you may find yourself having to bring more cash to close or negotiating with the seller to make the deal work. In some cases, a too-low appraisal could force you to walk away from the home. If you’re buying a home, here are some things to keep in mind about your appraisal.

Be Thoughtful About Your Offer

A hot market can force buyers to make offers well above the asking price. In some cases, buyers may end up agreeing to pay much more than the home is actually worth. If you have extra money to bring to the table, this might not be a problem, but if you don’t have extra cash on hand, a low appraisal might mean you can’t get financed. To avoid this scenario, you need to know the market. Keep an eye on comparable sales and hire a great real estate agent who knows the area well.

Appeal The Appraisal

Do you think the appraiser made an error? You may be able to appeal the decision.

Review the appraisal report to make sure everything checks out. Did they note all the property details correctly? Are the comparable properties cited in the report too far away from the home you’re buying? These may be grounds to dispute the appraisal. To start the appeal process, contact your lender.

It should be noted that this is a longshot process and appraisers are given the opportunity to correct errors before a new appraisal is ordered.

Don’t Stress

The appraisal results are out of your hands, so as the buyer, all you can really do is hope things work out the way they’re supposed to. The appraisal is in place to protect you and your lender from overpaying for a home – so a low appraisal could be a blessing in disguise.

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Home Appraisal Tips For Sellers

When you’re selling your home, it’s important that the home doesn’t appraise for significantly less than what the buyer agreed to pay. Unless you’ve got a cash offer, a low appraisal could be a deal-breaker. Here are some ways to help your home appraise for the right amount.

Provide An Offer List

If you received more than one offer for your home, let your appraiser know. Multiple offers can show the appraiser that your home was priced well. Provide the appraiser with a list showing each offer you received.

Attend The Appraisal

As the seller, you’re allowed to be present when the appraiser does their walkthrough. Accompanying the appraiser gives you the chance to point out any upgrades, improvements or particularly charming design features. This is your chance to make sure the appraiser doesn’t overlook those fantastic new cabinets or countertops you just installed.

Tidy Up

You can’t change your home’s square footage or location, but you can make your home look bigger, brighter and more valuable with a few affordable home renovation tricks.

Maximize your space by putting away countertop appliances and clutter. Replace dim light bulbs with brighter ones. Hang mirrors to maximize natural light and give the illusion of a bigger room. Pull furniture away from the wall. Pick up any debris in the front or backyard and give your garden some attention to boost your home’s curb appeal. Do whatever you can to make your home look tidier and more spacious.

Provide Comparable Properties

If you or your agent are aware of recent sales that could be considered in the report, provide them to your appraiser. Search public records for homes with a final sale price close to what you asked for your home. You can present this list to the appraiser when they arrive at the property.

Home Appraisal Tips For Refinancers

When you’re refinancing, you want to get the highest appraisal value possible. A low appraisal value could keep you from refinancing, but a high appraisal value means more equity for you – which could mean more cash out or better loan terms. Increase your chances of a high appraisal value by reviewing our refinance appraisal checklist and taking the following steps:

Get An Outside Opinion

Your home is full of memories, which may give you blind spots when it comes to defects in your home. Have a friend or family member examine each room in your home and point out areas that can be improved. Sometimes, a new set of eyes is just what you need.


A thorough decluttering will help each room look more put-together. While your appraiser shouldn’t assess your home’s value based on how much clutter or mess there is, it’ll be easier for them to see your home favorably if everything’s put away nicely.

List Upgrades And Improvements

Upgrades and improvements can increase your property’s value, but the work you’ve done may not always be obvious. Did you get a new air conditioner? Replace the windows? Add new landscaping? Provide your appraiser with a list of upgrades you’ve made so they can consider these items in their report.

It should be noted that these have to be improvements to have an impact on value. If you didn't have an air conditioner before, the addition of central air adds value, for example. However, if you replace an air conditioner that broke, that's maintenance and doesn't add to the value.

The Bottom Line

Appraisals are beneficial for everyone involved in the home buying process. For buyers, a home appraisal ensures they’re paying the current fair market value. For sellers, an appraisal helps them price their home competitively. And for lenders, an appraisal provides proof that a home is valued properly before they approve a mortgage.

Ready to continue your homeownership journey and apply for a mortgage or a refinance of your current home loan? Get started with Rocket Mortgage® today to learn more about the next steps in the home buying or refinancing process. 

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Hanna Kielar Headshot

Hanna Kielar

Hanna Kielar is a Section Editor for Rocket Auto, RocketHQ, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.