Appraisal
An appraisal is a licensed professional’s opinion of what your home is actually worth — and it’s the number your lender cares about most.
Your lender won’t hand over $350,000 just because you and the seller agreed on that price. They send an appraiser — a state-licensed professional — to verify the home’s market value. The appraiser visits the property, measures square footage, checks the condition, and compares it to recent sales of similar homes nearby (called “comps”).
If the appraisal matches or exceeds your offer price, you’re golden. If it comes in low, you’ve got a problem.
What Does an Appraisal Cost?
Expect to pay $400–$600 for a single-family home appraisal. On a $350K purchase, that’s a rounding error compared to your other closing costs. The buyer almost always pays this fee, and it’s due upfront — you won’t get it back if the deal falls apart.
FHA and VA loans sometimes require specialized appraisals that run $50–$100 higher. Rural properties or unique homes can push fees past $800 because finding good comps is harder.
What Happens If the Appraisal Comes in Low?
Say you offered $350K, but the appraiser says the home is worth $330K. Your lender will only base the loan on $330K. That $20K gap? You’ve got a few options:
- Ask the seller to lower the price to $330K
- Pay the $20K difference out of pocket
- Meet in the middle — negotiate a split
- Walk away (if you have an appraisal contingency)
Low appraisals kill roughly 10% of deals. Don’t assume it won’t happen to you.
Watch out for: Waiving your appraisal contingency in a bidding war. If the home appraises low, you’ll owe the difference in cash — no negotiating, no backing out. Only waive this if you have real reserves to cover a gap.
How Long Does an Appraisal Take?
The on-site visit takes 30–60 minutes. Getting the written report back usually takes 5–10 business days. In busy markets, it can stretch to two weeks. Your lender orders it, not you — so you can’t speed it up much.
The report itself runs 10–20 pages and includes photos, a sketch of the floor plan, comp analysis, and the final value opinion. You’re entitled to a copy, and you should read it.
Can I dispute a low appraisal?
Yes, but it’s an uphill fight. You or your agent can submit a “reconsideration of value” with better comps the appraiser may have missed. According to the CFPB, lenders must provide you a copy of the appraisal at least three days before closing. Use that time to review it carefully. If the comps used were outdated or not truly comparable, you have a case. Otherwise, the number usually stands. Some buyers order a second appraisal, but that means paying another $400–$600 with no guarantee of a better result.
Getting pre-approved before you start house hunting helps you understand your budget — so an appraisal gap doesn’t blindside you.
Real-World Example
You agree to buy a home for $425,000. The lender orders an appraisal, and it comes back at $410,000. Now there is a $15,000 gap. The lender will only base your loan on $410,000, meaning you must cover the difference with extra cash, negotiate the price down, or walk away using your appraisal contingency. If you waived that contingency to win a bidding war, you are on the hook for the full $425,000 regardless. This scenario plays out regularly in hot markets where offer prices run ahead of comparable sales data.
Run the Numbers
Use our affordability calculator to see how appraisal applies to your specific situation. Plug in your numbers and compare scenarios before making any financial commitments.
Related Terms
Understanding appraisal connects to several other concepts: Market Value, Closing Costs, Down Payment, and LTV. Each of these terms interacts with appraisal in ways that affect your buying power, monthly costs, or investment returns.
Frequently Asked Questions
Who pays for the appraisal?
The buyer pays the appraisal fee, typically $400-$700 for a single-family home. The cost is usually collected upfront or rolled into closing costs. Complex properties, rural locations, or multi-unit buildings can push the fee above $1,000.
Can you challenge a low appraisal?
Yes. You can file a Reconsideration of Value (ROV) with your lender, providing recent comparable sales the appraiser may have missed. Success rates vary, but strong comps within a half-mile radius and sold within the last 90 days give you the best chance of a revision.