What to Expect From a Home Appraisal

When people ask me what to expect from a home appraisal, they are usually a little nervous, and that is understandable. The appraisal is the one step in a purchase that can change the numbers after you thought the deal was set. Whether you are buying or selling, knowing how it works takes most of the mystery out of it.

According to the CFPB, an appraisal is a written document that shows an opinion of how much a property is worth. It often compares the home with similar nearby properties. Your lender may require one when you borrow money to buy or refinance a home.

It is not a home inspection. An appraisal is about value, not about the condition of the roof or the plumbing. If you are buying, you will still want an inspection of your own. In Texas, the standard contract form from the Texas Real Estate Commission (TREC) lets a buyer negotiate an option period, and many buyers use it for inspections.

Is an appraisal the same as an inspection?

No. An appraisal is an opinion of value for the lender, while an inspection looks at the condition of the home. Buyers usually want both.

Who pays for the appraisal?

The CFPB says the borrower typically pays. You will see the estimated fee on your Loan Estimate.

Can I get a copy of my appraisal?

Yes. For a first-lien mortgage, the CFPB says your lender must send you a free copy promptly after it is done and no later than three days before closing.

What if I think the appraisal is wrong?

Ask your lender about a reconsideration of value. Point to specific errors, such as wrong square footage, or sales that are not truly comparable.

Will a low appraisal always kill the deal?

Not necessarily. Buyers and sellers can renegotiate, or the buyer may bring more cash. Whether you can cancel depends on your contract, so ask your agent or an attorney.