Home Appraisal Explained: What Buyers Need to Know Before Closing
If you’re buying a home with a loan, a home appraisal is a step you can’t skip — and it can have a major impact on your deal. For many first-time buyers, the appraisal process feels like a mystery until they’re in the middle of it.
Here’s what a home appraisal is, why it matters, and what to expect before closing.
What Is a Home Appraisal?
A home appraisal is a professional, unbiased opinion of a home’s value. Your lender orders the appraisal to make sure the property is worth the amount they’re agreeing to loan you.
The appraiser considers:
Recent sales of similar homes (called “comps”)
The home’s location, size, and condition
Market trends and demand in the area
The result is an appraisal report — and that number plays a key role in whether your financing moves forward as planned.
Who Orders the Appraisal (and Who Pays for It)?
As the buyer, you don’t choose the appraiser — your lender hires a licensed professional through a third-party process. This ensures the valuation is objective.
However, you pay the appraisal fee, which typically ranges from $400 to $800, depending on your market and the property’s size. This cost is often included in your closing costs.
What Happens If the Appraisal Comes in Low?
If the appraised value is lower than the purchase price, the lender will only approve a loan based on the lower amount. At that point, you have a few options:
Renegotiate the price with the seller to match the appraisal
Bring extra cash to cover the gap between the appraisal and the purchase price
Cancel the deal if your contract allows
Sometimes, your agent and lender can dispute a low appraisal by providing stronger comparable sales — but there’s no guarantee it will be adjusted.
What Happens If the Appraisal Comes in High?
When the appraised value is higher than the purchase price, it’s great news for you. That means you’re starting your homeownership journey with instant equity — your home is worth more than you paid.
While it doesn’t change your loan amount, it’s a confidence boost and can be a financial advantage in the long term.
Why Home Appraisals Matter to First-Time Buyers
For first-time buyers, understanding the home appraisal process is essential. It’s not just a formality — it’s a safeguard for both you and your lender to make sure the property is worth the investment.
By knowing what appraisals are, who handles them, and how the results can affect your deal, you’ll be better prepared for one of the most important steps before closing.
Bottom Line
A home appraisal can make or break your closing timeline, so it’s important to know what to expect and how to respond to different outcomes. Whether the appraisal comes in low, high, or exactly as expected, having an experienced agent on your side can help you navigate the next steps with confidence.
📲 Ready to start your home search? Let’s talk about the process — from the first showing to closing day.
