Buying a home comes with a whirlwind of inspections, paperwork, and endless decisions. Amid all the chaos, one step quietly holds a lot of power over your purchase: the appraisal. This is the moment your future home gets officially measured, inspected, and judged, sometimes harshly, sometimes kindly. Knowing when is the appraisal done when buying a home can save you headaches, delays, and surprises.
Navigate Home Appraisal Like a Pro
The appraisal can make or break your homebuying journey, so knowing the process is a game-changer. Use Homelight’s Agent Match tool to find an expert who’ll guide you through the process and help you be confident in your buying decision.
When you understand its timing, process, and what to do if the value doesn’t match your expectations, you can have a less stressful buying experience. In this post, we’ll unpack it all so you can navigate your appraisal like a pro.
We talked to Brad Gore, a Branson, Missouri, real estate agent with over two decades of experience, to give us the key info on appraisals. Let’s dive into what you need to know.
What is a home appraisal?
First things first, what is a home appraisal? A home appraisal is an assessment of the fair market value of a real estate property. A trained professional, called a home appraiser, will objectively evaluate the property to determine how much it is worth.
These experts commonly use these factors to decide the value of a property:
- Comparable properties: Before even visiting a property, a home appraiser will evaluate the prices of recently sold properties in the same area. Appraisers use local multiple listing services (MLS) to evaluate this, among other resources.
- Age and condition: Appraisers will look at the history of the home to see when it was built and how well it has been maintained.
- Size of the house: Square footage has a large impact on a home’s value and will be used to either add or subtract value in comparison with other homes in the area. The number of bedrooms and bathrooms also has a significant impact on how much a home is worth.
- Location: The expected growth of a neighborhood, lot location, and prices of properties in the same area can all impact the appraised value of the home.
- Lot size: A bigger lot means a property has a higher value in most cases, especially if the property is located in a highly desired area.
- Upgrades: Any recent additions or upgrades in the home can add significant value to a home. Some updates carry more value than others, such as kitchen or bathroom renovations.
- Outdoor space: Depending on how well-maintained the yard or pool (if applicable) is, having outdoor space will often add value to a home and will be noted in the appraiser’s report.
Home appraisals keep buyers from overpaying and lenders from handing out more money than a home is really worth.
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Brad Gore Real Estate Agent
Brad Gore Real Estate Agent at ReeceNichols - Branson
Currently accepting new clients
- Years of Experience 22
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When is the appraisal done when buying a home?
To answer when the appraisal is done when buying a home, it helps to understand how the appraisal process fits into the overall timeline. Once you know how it works, you’ll be better prepared for what to expect and how to handle the results. Here’s an overview of the appraisal process:
Step 1: Seal the deal with an accepted offer
When you make an offer on a home, the seller will either accept, deny, or make a counteroffer. If the seller accepts, this is when you, as the buyer, sign the purchase contract to solidify the details of the sale.
If you committed to making an earnest money deposit as a part of your offer, you will submit your earnest money at this time. You typically deposit that in an escrow account, where it will be held until closing.
Step 2: Submit a full loan application
Before you start shopping for homes and making offers, it’s a good idea to get prequalified or preapproved for a mortgage. But you might not submit your full loan application to a lender until your offer is accepted, unless you have applied for an underwritten preapproval.
As soon as you’re under contract on a home, work with your loan officer to submit your loan application. Make sure to be quick about this, so they can get started on the next step.
Step 3: Order the appraisal
Once the offer is accepted and your loan application is submitted, that’s when the appraisal is done. Typically, the lender will coordinate the appraisal at the same time you submit your full loan application. “Many lenders go ahead and order [the appraisal] the first day we get it under contract,” says Gore.
If you are paying cash for your new home, it would still be a good idea to order your own appraisal to ensure you are not overpaying for the property. In this case, you or your buyer’s agent will be responsible for finding a reputable appraiser to evaluate the home.
Step 4: Let the appraiser visit the property and gather data
Once the lender orders the appraisal and the assignment has been accepted, the appraiser will reach out to either the seller’s agent or the seller directly to schedule a time to inspect the property in person.
The appraiser will take a look at the purchase agreement and purchase price beforehand, but this shouldn’t impact how they evaluate the property’s value. Their job is to use multiple factors to calculate an objective fair market value of the property.
“They’re trying to focus more on square footage, the location, the closest comps they can find, how many bedrooms, how many bathrooms … they try not to focus too much on if a color of granite is worth more than another color of granite,” explains Gore.
Once the appraiser gathers all the information they need and takes pictures of the home inside and out, they will write up an appraisal report. There isn’t a standard format required for these reports. However, Fannie Mae and Freddie Mac have developed standard appraisal report forms that are often used.
All appraisal reports should include at a minimum:
- The opinion of the value of the property (including the approach the appraiser took to determine this value)
- Date that the property was assessed
- Detailed information about the property (square footage, bedroom count, lot size, building materials, and so on)
- Information about the neighborhood
- Whether the property is located in a FEMA Flood Zone
- Evaluation of the comparable sales that were used to determine value
- Any defects that will need to be fixed before closing (safety issues, chipped paint, or exposed wiring)
Step 5: Receive the appraisal report
The typical appraisal takes between 21 and 28 days, so expect to wait about three weeks to get yours back. In most cases, the lender orders the appraisal, so the report is submitted to the lender.
The Equal Credit Opportunity Act Regulation B requires lenders to provide borrowers with a copy of the appraisal report three days before consummation of the loan, but in some cases, this can be waived.
Step 6: Renegotiate as needed
The appraised value of the home can impact both your loan and how much you have to pay for the property. In some cases, the appraisal can lead to a renegotiation. Here’s what to do for each scenario.
If the appraisal comes in low
Sometimes appraisals come back lower than the agreed-upon purchase price.
If yours comes back low, you may need to rethink your offer and plan for negotiation. A lower appraisal means the lender won’t lend you as much money as you will need to finance the purchase. Your options include:
- Trying to renegotiate the deal to a lower price
- Finding a new lender and getting another appraisal in hopes that the second appraisal will match the offer price
- Gathering data to support the purchase price and challenging the appraisal with a reconsideration of value
- Providing more cash to cover the gap
- Walking away if your purchase agreement allows
Don’t panic. “The first thing we try to do is help the appraiser see why the agents and the buyer and the seller have agreed on this price,” Gore explains.
“If it’s a government-backed loan, it will have to appraise at the value on the contract, so if the appraisal is low, you may have to do some negotiating, and if the seller is not amenable, you may not be able to buy that home,” says Gore.
Ultimately, you should strategize with your real estate agent to determine what makes the most sense for you and your situation.
If the appraisal is accurate
With an appraised value that matches your purchase price, you can move forward with the purchase and closing smoothly. Your lender will continue processing your loan without adjustments. This outcome also means you won’t need to renegotiate with the seller or bring extra cash to the table.
If the appraisal comes in high
A high appraisal is also cause for celebration. It means you have agreed to pay the seller less than what the property is worth, so you have already built equity in your new home.
Frequently asked questions about appraisals
A few common issues can slow down the appraisal timeline, even when the deal is otherwise moving along. In busy markets, appraisers can be hard to book, which leads to scheduling backlogs. Rural or one-of-a-kind homes may also take longer since there aren’t many similar properties to compare them to.
Delays can happen if the appraiser can’t get full access to the home or if bad weather or natural disasters create a pileup of appraisals. On top of that, lenders sometimes ask for revisions or extra details, which can add more time to the process.
If the appraisal is delayed, closing can get pushed back because the lender can’t finalize the loan without it. That delay can slow down other steps in the buying process, too. You may need to ask the seller for a closing extension to keep the deal together. While delays are frustrating, working closely with your lender and agent can help keep the deal moving forward.
The homebuyer typically pays for the appraisal, but it’s possible to negotiate payment by the seller in certain situations. The average price for an appraisal is between $500 and $700, according to Gore.
The cost can vary widely depending on the size of the home, the local market, and where the home is located. For example, an appraisal for a home in a more rural area might be more costly to account for the time that it would take an appraiser to travel there.
A home inspection focuses on the condition of the property, while an appraisal determines its value. The inspection checks things like the roof, foundation, plumbing, electrical, and HVAC to spot any issues, while the appraisal compares the home to similar nearby properties to confirm what it’s worth.
Buyers usually choose the home inspector (with help from your agent), but the lender picks the appraiser unless you’re paying cash. Inspections don’t directly affect your loan, but appraisals can. However, if you have an inspection contingency in your purchase agreement, you may be able to back out of the purchase or renegotiate the purchase price if an inspection reveals something that needs repair.
The time period that a lender will accept an appraisal is called the term of validity. The exact expiration date depends on the lender. Some lenders won’t consider an appraisal valid after 120 days, while others require a new appraisal after as little as 60 days.
Because market conditions can change so rapidly, lenders want to make sure that the value of the home will remain the same from the time the appraisal is completed to the day of closing.
Find an Agent To Help You Make Sense of Your Home Appraisal
Working with a top agent can help you take the stress out of evaluating your low appraisal options.
Making sense of home appraisals
Home appraisals don’t have to feel confusing or stressful when you know what to expect. The right real estate agent can help you understand the appraisal report, anticipate potential issues, and keep your purchase moving forward.
With expert guidance, you’re better equipped to navigate every step of the homebuying journey with confidence. Use HomeLight’s agent matching service to connect with a trusted local agent and take the stress out of buying a home.
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