Home Appraisal

A home appraisal refers to the unbiased estimate of a house's worth. One of the main advantages of conducting a home appraisal is protecting lenders from financing a house that is over-priced.

In the same way, a buyer benefits from appraisals where they are protected from paying more than they should for a home. Additionally, this process helps buyers to identify potential problem areas in the home and ask for renovations or changes before they can commit. Also, it helps both the buyer and seller to negotiate a fair price. Having understood why it is important to have a home appraisal, it is only fair to guide you through the process.

Ordering and Paying for an Appraisal

Mortgage lenders order for appraisals to be done by an independent and licensed appraiser. However, it is the buyer who pays for the cost of the appraisal. Normally, appraisal costs range between $450 and $750 depending on the size of the home and the location. This amount is then included in the closing costs, which are covered by the buyer. However, buyers need not be dissuaded by these costs as they are only payable after the seller has accepted the bid price.

Determining Your Home's Value

An appraiser determines the value of a home by viewing the property and by reviewing recent sales of homes similar to the one being sold.

In-Person Visitation of the Property

Usually, on-site viewing of the home takes about an hour. During this time, the appraiser will be measuring to get the exact footage of the house. Also, they will look for the number of bathrooms and bedrooms. Next, they will compare these finds with the local county records on housing data to ensure that they match. The appraiser will then begin to check the status of some of the major systems in the house. For example, the appraiser will look for water damage, leaky plumbing, and the need to replace any of the major structures of systems in the house.

Reviewing Similar Homes

After the on-site visitation, the appraiser will begin evaluating similar homes that were recently sold in the specific neighborhood or general area. In this case, the appraisers will mostly be looking at house with similar architectural design, square footage, and age. Typically, the comparable homes must have been sold or listed between the past 3-6 months.


After determining the value of property, the appraiser will then compose a report for the buyer and the lender. The report will be detailed with findings of the home's worth and how they determined that value. Basically, they will include photos of the inside and outside of the house, current market analysis, size and condition of the house including comments on problems with the structure or systems and the surrounding area, and recent renovations on homes.

Low Appraisals

Sometimes, the appraisal value can be lower than the sales price. This poses a challenge for the buyer, as the lender will most likely give you a percentage of the appraisal value, meaning that you do not get the full amount you applied for. This can be dealt with by disputing the appraisal or asking the seller to lower their price.