How the home appraisal process works

If you're buying, selling, or refinancing a home, you may need a home appraisal. Most commonly, mortgage lenders require an appraisal before they will approve a buyer's mortgage.

Each situation has its own process, but knowing how it works can help make things go more smoothly. We partnered with appraisal experts at The Appraisal Foundation to explain the appraisal process, whether you're buying, selling, or refinancing a home.

What is the home appraisal process for buyers?

When buying a home with a mortgage, an appraisal is needed to make sure the home's value supports the loan amount. The good news is that the lender and appraiser do most of the work.

The home appraisal process starts when a lender hires an appraiser to create an appraisal report. The appraiser follows several steps to develop their opinion of a home's value. Once they review all the information, they write the appraisal report and give it to the lender.

If the appraised value of the home is favorable, the lender typically moves ahead with the loan. However, if the appraised value is less than expected, it could cause issues with the mortgage. In that case, ask for a copy of the appraisal and review it carefully. If you believe the appraisal report contains errors or overlooks important details about your home, start by discussing your concerns with your real estate agent to determine the best course of action.

Often, minor issues can be resolved quickly. If you and your real estate agent feel it's necessary to challenge the home appraisal, talk to your lender about submitting a formal reconsideration of value.

How does the home appraisal process work for sellers?

For home sellers, the appraisal process can sometimes be stressful, but knowing what to expect can really help. An appraiser will contact either you or your listing agent to arrange a time for the physical inspection. Follow these tips throughout the home appraisal process:

1. Before the appraisal
   • Gather documentation of any recent renovations, repairs, and upgrades.
   • Use our Home Appraisal Prep Tool to combine your documents and home details into a clear, easy-to-read summary for the appraiser.
   • Make sure all areas, like crawl spaces and attics, are accessible.
2. During the appraisal inspection
   • You or your listing agent should be present to answer any questions.
   • The appraiser needs access to all areas of the home and property.
   • They cannot discuss the home's value with you during the inspection.
3. After the appraisal
   • After completing their research, the appraiser creates a report that details their professional opinion of the home's value.
   • Expect the appraiser to need a few days to complete their report and provide it to the buyer's mortgage lender.
   • You can ask your real estate agent to request a copy of the appraisal report from the buyer or their agent, but it's up to them whether to share it.
4. Dealing with a low appraisal
   • If a home's appraised value is less than the agreed sale price, the buyer's loan could be affected.
   • You might need to change the home's sale price or ask the buyer to make up the difference in cash or other funding.
   • If you believe errors or missing information led to a low appraisal value, talk to your listing agent to see if it makes sense to challenge the appraisal.
5. Challenging an appraisal
   • Make sure you understand what goes into challenging an appraisal before taking action.
   • If you get a copy of the appraisal report, carefully review it and make a list of any errors. Share your findings with your real estate agent and ask them to talk to the buyer's agent about what to do next.
   • Minor issues, like fixing a typo or updating details that would not impact the appraised value, are typically resolved by simply making the lender aware. If you believe the report contains major errors affecting the home's value, consider asking the buyer to request a formal reconsideration of value from their lender.

Most of this information also applies if you're refinancing. Instead of working with a listing agent or a buyer, you can talk directly to your lender about any questions or concerns.

No matter where you are in the process, you can use our Home Appraisal Advisor to get guidance and answers to your home appraisal questions.