How Does the Appraisal Process Work?
- By Jim Blackburn
- on
- 100 first time home buyer FAQs
1. A Licensed Appraiser Assesses the Property’s Market Value
Once you’re under contract, your lender will order an appraisal from a licensed, independent appraiser. During the visit, they’ll evaluate:
The home’s location
The size, layout, and features
The condition of the home and any upgrades
Recent comparable sales (aka “comps”) in the areaThe goal? To estimate fair market value based on data—not emotion.
Understanding what you can afford based on appraised value is crucial. Calculate your Conventional Purchase Loan Payment now to see how different appraised values affect your loan amount and monthly payment.
2. The Appraisal Report Helps Your Lender Confirm the Home’s Value
After the inspection, the appraiser creates a report that gets sent to your lender. This report includes:
Photos and property details
Comparable home sales
The appraised value of the homeThe lender uses this number to determine how much they’re willing to loan—because they won’t lend more than what the home is worth.
Before your appraisal, get a professional estimate of your home’s value. Get your Free Home Value Report to understand what the property might appraise for and avoid surprises during the loan process.
3. If the Appraisal Comes in Low, You Have Options
What if the home appraises for less than your offer?
- Negotiate with the seller to lower the price
- Pay the difference out-of-pocket
- Challenge the appraisal (if you believe it was incorrect)
- Walk away, if you have an appraisal contingency
Don’t panic—a low appraisal doesn’t mean the deal is dead. But it does mean you’ll need a plan.
If you need to adjust your financing strategy due to a low appraisal, explore flexible options. Calculate your FHA Purchase Loan Payment now to see if FHA’s lower down payment requirements could help you bridge the gap between appraised value and purchase price.
Veterans have additional flexibility when dealing with appraisal challenges. Calculate your VA Purchase Loan Payment now to explore how VA financing—with no down payment requirement—gives you more options if the appraisal comes in low.
Unsure How the Appraisal Will Affect Your Loan? Let’s Talk It Through
At Stairway Mortgage, we guide you through every step—so surprises become strategies.
📘 Download our homebuyer guides for appraisal preparation tips.
📊 Check Current Rates to see today’s mortgage rates.
🧮 Explore all our Loan Calculators to plan for different scenarios.
🏡 Get a Free Home Evaluation before your appraisal.
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