What Is Appraisal?
Appraisal: An independent estimate of a home's market value, ordered by the lender.
An appraisal is a licensed appraiser's opinion of a home's market value. Your lender orders it to make sure the home is worth enough to secure the loan. You usually pay for it.
How it works
- The lender orders the appraisal through an independent management company.
- The appraiser inspects the home, measuring it and noting condition and features.
- They compare it with recent comparable sales, adjusting for differences.
- They issue a report with the appraised value.
Cost and timing
A single-family appraisal usually costs $500 to $900, more for large, rural or multi-unit homes. The report typically takes one to two weeks.
Why it matters
Your loan-to-value ratio is based on the lower of the price and the value. If the value is low, see appraisal gap.
Good to know
You're entitled to a copy of the appraisal at least three business days before closing.