Whether you are buying your first home, selling, or refinancing, a home appraisal is a key step in the mortgage process.
🚨 Upcoming Changes to Home Appraisals (Effective November 2, 2026)
New changes are coming to home appraisals. Here’s what is changing and how you can prepare:
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Updates Get More Specific: Each kitchen and bathroom renovation will now include update status, timing, and condition.
How to prepare: Gather renovation dates, receipts, and permits, if available. -
Converted Spaces: Garage conversions, finished areas, and accessory dwelling units (ADUs) will receive more detailed reporting.
How to prepare: Gather floor plans, permits, and records for additions or conversions. Confirm advertised square footage is accurate. -
Special Features: Reporting will capture more detail about roof age, energy-efficient features, storm protection, and applicable waterfront access.
How to prepare: Gather roof replacement records and documentation for solar systems, storm-resistant features, and private water-access rights, where applicable.
What is a Home Appraisal?
An appraisal is a professional, unbiased opinion on a home’s fair market value. A mortgage lender usually needs it during the homebuying or refinancing process to confirm the loan amount fits the home’s value. An independent third-party appraiser, who represents neither the buyer nor the seller, performs the evaluation.
What to Expect During a Home Appraisal Process?
The home appraisal process follows a simple, step-by-step path:
- Your lender orders the appraisal: Once the appraisal is ordered, the assigned appraiser usually schedules visit within 48 hours.
- The appraiser does a walk-through and research: The appraiser inspects the inside and outside of the home, reviews recent sales of nearby comparable homes, and checks public records.
- The report is prepared and shared: The appraiser writes a detailed appraisal report. This report is shared with the buyer and lender. Note: Buyers are not obligated to share the appraisal report with the seller.
- The appraisal fee is paid for: The buyer is typically responsible for paying the appraisal fee as part of their closing costs.
What Do Appraisers Look For?
Appraisers review the home’s overall condition, lot, and structural integrity. They also note any visible property flaws, such as roof damage or a cracked foundation.
Once the physical inspection is complete, the appraiser researches the local housing market to compare the property’s size, age, and condition to similar homes in the same neighborhood. An appraiser generally looks for at least three comparable homes (“comps”) that have sold within the last 90 days. This side-by-side check helps them judge the home’s value is accurately evaluated, factoring in any upgrades or deficiencies that affect market value.
Factors That Affect a Home’s Appraisal:
- Total square footage of the home
- Number of bedrooms and bathrooms
- Age and overall condition of the property
- Construction materials used; energy-saving upgrades can add value
- Lot size and local zoning rules
- Permanent home improvements like a new roof, updated floors, or upgraded windows
- Damage or deferred maintenance that lowers value
- Additional amenities and special features
- Recent comparable sales (“comps”) in the immediate neighborhood
- Location and proximity to local amenities
- Current state of the local housing market
Understanding Your Appraisal Results
Once you get the appraisal report, take time to review it for errors. Your lender will use this final valuation to determine your loan eligibility.
After the appraisal, your will usually see one of three results:
Appraisal Matches the Offer: This is the ideal scenario for all parties. The lender finalizes the loan, and you move toward closing at the agreed-upon sale price.
Appraisal is Greater than the Offer: This is a win for the buyer! It means you are getting instant equity in the property right out of the gate.
Appraisal is Lower than the Offer: A low appraisal means the home is valued below your purchase price. Because lenders will only finance up to the appraised value, you have a few options as a buyer:
- Renegotiate the purchase price down with the seller.
- Make up the difference in cash by increasing your down payment.
- Walk away from the deal (if your contract includes an appraisal contingency).
What is an Appraisal Contingency?
When you make an offer on a home, your real estate agent will typically include an appraisal contingency. This contract clause ensures that if the home appraises for less than the agreed upon purchase price, you have the legal right to renegotiate, cover the difference, or walk away from the deal with your earnest money deposit fully protected.
What is a Reconsideration of Value (ROV)?
If your appraisal report comes back lower than expected and you notice factual errors, such as incorrect square footage, a missed bedroom, or weak comparable sales, your real estate agent or lender can submit a formal Reconsideration of Value (ROV). This requests that the appraiser review new or corrected data (like permits, receipts, or better comps) to adjust the valuation.
Navigate Your Home Appraisal with Confidence
Whether you are buying or selling, the home appraisal process is simply designed to protect all parties and ensure the home is sold for its true fair market value.
If you have questions about home appraisals, mortgage pre-approvals, or the homebuying journey, contact us today to speak with an experienced loan officer!
Frequently Asked Questions About Home Appraisals
Can I be present during a home appraisal?
No. Buyers and sellers usually do not attend the interior/exterior walk-through. The appraiser is an independent third party who conducts the inspection objectively based on structural and market data.
How long does an appraisal take?
The on-site usually takes between 30 minutes to an hour, depending on the size of the home. However, receiving the final written report from the lender typically takes anywhere from 3 to 7 business days.
What happens if the appraiser misses a major home improvement?
If the appraisal report has factual errors, such as a missing a newly renovated kitchen or miscalculating square footage, your real estate agent and lender can submit a formal Reconsideration of Value (ROV) along with receipts, permits, or corrected comparable data for the appraiser to review.
