If you’re in the process of buying a home, you’ve probably heard the term home appraisal come up—especially once your offer is accepted and you’re securing a mortgage. But what exactly is an appraisal, why does it matter, and how can it impact your home purchase?

Let’s break it down so you feel confident as you move through this important stage of your home-buying journey.

What Is a Home Appraisal?

A home appraisal is an unbiased, professional opinion of a property’s market value. It’s typically required by lenders to ensure the home is worth the amount they’re lending you. In most cases, the lender orders the appraisal, but the buyer pays for it—usually costing between $400–$700, depending on the property and location.

Why Is an Appraisal Important?

The main purpose of an appraisal is to protect the lender. They want to make sure they’re not loaning more money than the home is actually worth. But appraisals also serve buyers by helping you avoid overpaying for a home.

If the appraised value matches (or exceeds) the purchase price, you’re in the clear. If the appraisal comes in low, it could cause delays or even jeopardize the deal.

How Does the Appraisal Process Work?

Here’s what typically happens during an appraisal:

1. The Appraiser Visits the Property
   A licensed appraiser will visit the home to evaluate its condition, features, size, location, and overall livability. They’ll take measurements, photos, and notes on upgrades or needed repairs.

2. Market Comparison
   The appraiser researches comparable recent sales—called "comps"—in the neighborhood. These are similar homes that have sold in the past 3–6 months.

3. Valuation Report
   The appraiser compiles their findings into a formal report and assigns an estimated market value to the home. This report is shared with the lender and sometimes the buyer.

What Happens If the Appraisal Comes In Low?

If the appraisal value is lower than the purchase price, you have a few options:

• Renegotiate the Purchase Price with the seller.

• Make up the difference in cash.

• Request a second appraisal (though this is rare and may require lender approval).

• Back out of the deal if your contract includes an appraisal contingency.

This is where having a great real estate agent on your side is crucial—they can help guide you through negotiations and protect your interests.

Tips for Buyers

• Don’t skip the appraisal, even in cash deals—it’s a smart way to verify value.

• Keep contingencies in place, especially in a competitive market.

• Ask questions if the appraisal value comes in lower than expected—your agent and lender can help you understand the report.

In Summary

The home appraisal is a key checkpoint in your home-buying process. It helps ensure you're making a sound investment and gives both you and your lender peace of mind. While it might feel like just another hurdle, understanding how it works—and what to do if the numbers don’t align—can help you move forward with confidence.

If you’re preparing to buy a home and have questions about appraisals or any other step in the process, we’re here to help. Let’s make your home buying experience as smooth and informed as possible.