A home appraisal is an unbiased estimate of the property’s value. It’s conducted by a licensed or certified appraiser, usually to help lenders understand what the home is worth. On average, a home appraisal can cost $314 to $425, according to estimates from Angi. Actual costs can vary by property, location, loan type, and other factors. The buyer typically pays for the appraisal.

What is a home appraisal?

A home appraisal is an estimate of a house’s market value, conducted by an independent appraiser who is licensed or certified to assess property values. The appraised value will not necessarily be the same as the property’s listed price. Instead, the appraised value is the estimated worth of the home based on a number of factors, such as the home’s condition and location. This may differ from the seller’s asking price.

Mortgage lenders require an appraisal to assess the current value of the property. The appraisal protects the seller, borrower, and lender by assuring all parties that the price paid for the home reflects its actual worth.

An appraisal is not the same as an inspection. With a home inspection, the buyer hires an inspector to evaluate the property’s condition, whereas the mortgage lender schedules the appraisal to assess the value. The inspection spells out any problems with the property, and the buyer decides whether they still want to buy the house after looking at the inspection. Inspections generally cost between $300 and $500, and buyers often have to pay for both the inspection and appraisal.

Appraisers are licensed and certified professionals who are legally required to be independent and impartial to ensure the process is conducted fairly. 

Appraised value vs. market value

The appraised value helps lenders determine how much to lend for a home. The market value signals what buyers are willing to pay. 

Here are a few major differences between the appraised and market values.

• Appraisers set the appraised value, while buyers and sellers determine the market value.
• The appraised value is based heavily on the property’s details, while the market value can be influenced by housing supply, inflation, and other economic factors.  
• Appraised values change only with a new appraisal, while market values can fluctuate more frequently with changes in the economy.

Lenders use the appraised value when determining a buyer’s approved loan amount. So if it comes in significantly lower than market value, the buyer may have trouble securing the loan.

What factors are considered in a home appraisal?

Generally, an appraiser will conduct an in-person assessment of the home before stacking it up against sales of nearby comparable properties, also known as “comps.” If the home has better amenities or more rooms than the comps, it will probably have a higher appraised value.

Appraisers may consider the following factors when comparing a home to its comps:

• Square footage and number of rooms
• Age and condition of the home
• Construction quality of the home
• Upgrades and special features, such as a fresh coat of paint or a new front door
• Land area
• Location

When is an appraisal required?

If you are looking to buy a home, refinance your current mortgage, or take out a home equity loan or line of credit, your mortgage lender will usually require an appraisal to approve the loan. 

Even if an appraisal is not required, there are other reasons homeowners might choose to get a voluntary appraisal. These may include:

• Selling your home: An appraisal could help you determine your asking price.
• Tax assessment disputes: If you disagree with the local tax authority’s valuation of your property, an appraisal could provide proof of the accurate value.
• Estate planning or divorce: If the home’s value must be split among multiple individuals, either because it is an inherited property or because the owners have dissolved their union, an appraisal can help with a fair division.

Can you waive an appraisal?

Though mortgage lenders typically require an appraisal to approve an original mortgage, refinanced mortgage, home equity loan, or HELOC, lenders may allow buyers to bypass an appraisal if they have sufficient data to determine the property’s value. 

Mortgage lenders use valuation models as part of the automated underwriting system. If the system finds enough data to reliably estimate the home’s value, it triggers an option to waive the appraisal—which can save the buyer money and time.

Only single-family or 1-unit residences are eligible—and only conventional loans backed by Fannie Mae (through their Value Acceptance program) and Freddie Mac (through their ACE program) with a 90% loan-to-value ratio qualify.

Buyers can’t request home appraisal waivers, and lenders aren’t required to waive them just because their underwriting system offers it.

How much does a home appraisal cost?

The lender is the one that ultimately chooses and schedules the appraisal, but the buyer is responsible for paying for it — usually as part of their closing costs. 

Since an appraiser must be an impartial third party, buyers cannot shop around to find a different appraisal company to handle this task. Other than requesting an appraisal waiver, the only way a buyer can mitigate the cost of an appraisal is by asking the seller to cover the cost of the appraisal as part of the sales negotiation.

Home services platform Angi shows that the average is $314 to $425 nationwide. Costs can vary widely by loan type.

Source: How Much Does a Home Appraisal Cost? 2026 Data, Angi.

How long does a home appraisal take?

If your lender requires an in-person appraisal, the actual walk-through process can take up to several hours, depending on the size and amenities of the home.

The time it takes for the appraiser to complete the appraisal report will vary from one home to another. However, the NAR found that it typically takes 11 calendar days from the date the contract is accepted to receive the written appraisal. 

No matter how long the appraisal process takes, the lender must provide the borrower with a copy of the appraisal report as soon as possible and no later than three days before the closing date. This gives the borrower time to review the appraisal prior to closing and request a re-analysis in case of inaccuracies.

Common types of home appraisals

Full appraisal

A full appraisal is the traditional type of appraisal. It involves an on-site physical assessment of the property, in which the appraiser will evaluate its condition, features, amenities, and more. This will usually take a few hours, and it’s longer and more expensive than approaches that are solely data-driven.

Drive-by appraisal

With a drive-by appraisal, an appraiser will still physically go to the home, but they’ll focus on the exterior only — items they can “drive by” and see. They also may drive through the neighborhood to gather data on comparable homes and the overall market.

Desktop appraisal

A desktop appraisal is an appraisal that does not involve an actual physical inspection of the property. Instead, the appraiser uses data such as public records and the Multiple Listing Service (MLS) to assign a value to the home. These appraisals are usually faster and less expensive than full appraisals. On one hand, they can be less accurate — on the other, they can eliminate issues such as appraisal bias.

Hybrid appraisal

Hybrid appraisals involve a physical appraisal of the property, but not one conducted by the actual appraiser. Instead, that’s done by a contractor or other third party. They give the evaluation to the official appraiser, who will then use it — plus other data — to create the appraisal report. This is usually done to save on time and costs.

Appraisal gaps

If a home’s appraised value comes in lower than what you’ve offered to pay for it, this is called an appraisal gap, and it can pose a big problem for your home purchase.

Say you’ve offered $500,000 for a home you love, but when the appraisal is done, you learn its appraised value is only $450,000 — leaving you with a $50,000 “gap.” Since mortgage lenders will only loan you up to a home’s appraised value, you’d be left to make up that $50,000 gap out of pocket. 

If you can’t pay that extra cash, there are other strategies you can explore below. 

What if my appraisal comes back too low?

If the appraisal comes in lower than expected, first check the report for errors in the property details, irrelevant comps, or missing information. You can request a reconsideration of value (ROV), the formal appeal process, to ask the lender to review the appraisal with the corrected or updated data. 

If the appraisal has no inaccuracies, you can consider negotiating a lower price with the seller or covering the difference with cash. However, paying more than the home is worth can strain your finances and make selling less profitable or refinancing more difficult down the road.

You might also request to order a second appraisal, renegotiate the sale price with the seller, or, depending on your contract, back out of the deal entirely. In this case, you’d need to have an appraisal contingency clause in place to get your earnest money deposit back.  

What if my appraisal comes back higher?

There’s generally nothing you need to do when a home appraisal comes back higher than expected. It simply means the property is worth more than you agreed to pay. 

Higher appraisals don’t affect your loan amount, as the loan approval amount is based on the lesser of the appraisal or the purchase price. Your down payment, interest rate, and other loan terms also remain unchanged. 

You also don’t have to worry about a higher purchase price, which is generally locked in once you sign the purchase agreement.

What is a home appraisal contingency?

An appraisal contingency is a type of clause you put in your sales contract when making an offer on a home. Think of it like an “out” clause — a back door out of the transaction if your home doesn’t appraise for as high a value as you expect. 

With an appraisal contingency in place, you’re free to exit the deal unscathed if there’s an appraisal gap. You’ll even get your earnest money deposit back in the process.

How to prepare for a home appraisal

You can prepare for a home appraisal with basic repairs, interior and exterior cleaning, and doing your research.

Here are a few tips to keep in mind:

• Clean and declutter inside so the size of rooms is evident, and the appraiser doesn’t mistake dirt and grime for neglect.
• Try to make minor repairs, like leaking faucets, broken handles, and running toilets.
• Tend to the exterior by mowing the lawn, removing weeds, repainting where it’s peeling, and fixing broken shingles.
• Double-check your safety systems, like smoke and carbon monoxide detectors.
• Run your own search of comparable homes that sold near you.
• List your major renovations and updates (including the dates completed and the cost) and gather relevant documents and receipts.

What negatively affects a home appraisal?

There are several property factors and market dynamics that can lead to a lower-than-expected home appraisal.

• Deferred maintenance and repairs can lead to an appraiser lowering the home’s value. This could range from chipped paint to major structural issues.
• Outdated appliances and systems, like electrical, plumbing, and HVAC, can affect energy efficiency, safety, and ultimately, the home’s estimated value.
• Neglected landscaping and a lack of curb appeal may signal that the house is not well maintained.
• Comparable homes that sold significantly lower than your property’s value could bring it down.

What to do if you experience appraisal bias

The home appraisal process isn’t foolproof, and with real-life humans involved, bias can slip in on occasion. For example, an appraiser might let a neighborhood’s, buyer’s, or seller’s demographics or characteristics influence what value they assign to the property. If this happens, it’s considered appraisal bias.

This happens most often in areas with significant Black and brown populations. In fact, a 2023 study by the Federal Housing Finance Agency found that over 16% of predominantly Latino and Hispanic homes were undervalued over a 10-year period. Nearly 14% in majority Black areas were too. 

If you feel you’ve experienced bias in the appraisal process, file a complaint with the Consumer Financial Protection Bureau, the Office of Fair Housing and Equal Opportunity, or your state’s appraiser regulatory agency. You can also request a reconsideration of value (ROV) through your lender.

Manoj Sharma

Manoj Sharma is a Senior Writer on the banking team at Tax Assistant. He provides information on budgeting, bank accounts, the banking industry, and other related topics. Using original data and methodologies, he helps you identify the best financial institutions, accounts, and products tailored to your needs. Manoj holds a degree in Journalism and Political Science from Syracuse University. All articles are strictly reviewed and fact-checked by our panel of expert Chartered Accountants, including CA Devendra Saini, CA Nikhil Khunteta, and CA Ankit Goyal