A home appraisal is a licensed appraiser's independent opinion of a home's market value, ordered by your lender after you go under contract. The appraiser looks at the home, compares it with similar recent sales nearby and writes a report. The lender uses that value to decide how much it can lend, so the appraisal protects both you and the lender from financing a home for more than it's worth.
I'm Paul Mattos, a mortgage broker with Refine Mortgage serving buyers in North Carolina and South Carolina. Here's how the appraisal works, how long it takes, who pays for it and what happens with the result.
The Quick Answer
The lender orders the appraisal after you're under contract, usually through an appraisal management company.
A licensed appraiser visits the home, reviews comparable sales and writes a report with an opinion of value.
Your loan is based on the lower of the purchase price or the appraised value.
The buyer usually pays for the appraisal, often upfront or as part of closing costs.
You're entitled to a copy of the appraisal before closing.
Some loans qualify for an appraisal alternative instead of a full appraisal.
Why Lenders Require an Appraisal
The home is the collateral for your mortgage. If a lender financed a home for more than it was worth and the loan later went bad, the lender could lose money, and you could owe more than the home is worth. The appraisal gives the lender an independent check on value before it commits to the loan.
It also helps you. If the value comes in below the price, you find out before closing, while you still have options. See what happens if the appraisal comes in low?
How the Appraisal Process Works
1. The Lender Orders It
Once you're under contract and have told your lender you want to move forward, the lender orders the appraisal. To keep the process independent, the lender usually orders it through an appraisal management company, and you, your agent and your loan officer can't pick the appraiser or pressure them toward a number.
2. The Appraiser Visits the Home
The appraiser measures the home, notes the layout, condition, updates and features, and takes photos inside and out. The visit is usually much shorter than a home inspection. The seller or listing agent typically arranges access.
3. The Appraiser Researches Comparable Sales
Comparable sales, often called comps, are similar homes nearby that sold recently. The appraiser adjusts for differences like size, bedrooms, lot, condition, garage and upgrades. In areas with unique homes, like waterfront property or acreage, finding good comps can take more work. See the Lake Wylie mortgage guide for how water and location can affect value.
4. The Report Goes to the Lender
The appraiser sends the completed report to the lender. Underwriting reviews it for value, property type and any conditions that need attention.
5. You Get a Copy
Federal rules generally require lenders to give you a copy of the appraisal promptly, and no later than three business days before closing. Read it. If you see a factual error, like the wrong square footage or bedroom count, tell your loan team right away.
How Long Does an Appraisal Take?
It depends on the area, the property and how busy appraisers are. The visit itself is usually short, and the report often comes back within one to two weeks of being ordered. Rural homes, large or unique homes and busy seasons can take longer. Your contract deadlines should leave room for it, so talk with your agent and loan team before you sign.
Who Pays for the Appraisal?
The buyer usually pays. Some lenders collect the fee upfront when the appraisal is ordered, and others include it in closing costs. The cost varies by loan type, home size and location. Your Loan Estimate will show the appraisal fee. See what are closing costs for buyers?
If you cancel the purchase after the appraisal is done, the fee usually isn't refundable, because the work has been completed.
Appraisal vs. Home Inspection
They're not the same, and you usually want both.
An appraisal is for the lender. It estimates market value and notes major condition issues that affect value or loan eligibility.
A home inspection is for you. It's a much deeper look at the roof, systems, structure and safety items, and it's usually optional but strongly recommended.
An appraisal won't catch everything an inspector would, and an inspection doesn't tell you what the home is worth.
FHA and VA Appraisals Look at Condition Too
FHA and VA appraisals also check whether the home meets the program's minimum property standards. Things like peeling paint on older homes, missing handrails, roof problems or safety hazards may need to be fixed before closing. A home can appraise at the contract price and still need a repair before the loan can close.
New Construction Appraisals
When a home is still being built, the appraisal is usually done "subject to completion," based on the plans and specifications. Once the home is finished, the appraiser often comes back for a final inspection to confirm it was completed as described. See buying a new construction home in Charlotte.
Can You Skip the Appraisal?
Sometimes. Some conventional loans are eligible for an appraisal alternative, where the lender's automated system accepts the value without a traditional appraisal, sometimes with a property data collection visit instead. Fannie Mae explains its value acceptance option. Eligibility depends on the loan, the property and the data available, and you can't choose it on your own. Some buyers still prefer a full appraisal for peace of mind.
How Long Is an Appraisal Good For?
Appraisals have a shelf life. For many conventional loans, an appraisal older than about four months needs an update, and it generally can't be used past a year. FHA appraisals are generally valid for 180 days. If your closing gets delayed, ask your loan team whether the appraisal will need an update.
Appraisals When You Refinance
Most refinances also need an appraisal or an appraisal alternative, because your home's current value affects the loan amount, mortgage insurance and whether you can take cash out. See how soon can you refinance after buying? and cash-out refinance explained.
If you're hoping to drop private mortgage insurance because your home's value has gone up, your servicer may require its own valuation. See can I remove PMI without refinancing?
What If You Disagree With the Value?
If the report has factual errors or missed relevant comparable sales, you can ask your lender about a reconsideration of value. Provide specific, supportable information, such as recent sales the appraiser didn't use. Disagreeing with the number alone usually won't change it, and a request isn't guaranteed to change the value. See what happens if the appraisal comes in low?
Your contract also matters. Whether a low value lets you renegotiate or cancel depends on your signed agreement and deadlines, and so does what happens to your deposit. See what is earnest money? Also see can I back out after going under contract?
How to Prepare
Get a strong pre-approval so you know how much flexibility you have. See how to get pre-qualified and pre-approved in Charlotte.
Ask your agent how the price compares with recent nearby sales before you offer.
Make sure your contract timeline leaves room for the appraisal.
Keep some cash cushion in case the value comes in low.
Read the appraisal as soon as you get it.
To see how the appraisal fits into the rest of the process, read what happens after mortgage pre-approval.
Frequently Asked Questions
Can I choose my own appraiser?
No. To keep appraisals independent, the lender or its appraisal management company assigns the appraiser.
Can my real estate agent talk to the appraiser?
Agents can usually share helpful information, like recent comparable sales or a list of upgrades, but nobody involved in the loan can pressure the appraiser toward a value.
Do I need to be home for the appraisal?
No. The seller or listing agent usually arranges access when you're buying.
Does a high appraisal help me?
It can give you some instant equity on paper, but your loan is still based on the purchase price, not the higher value.
Will the appraiser tell me the value at the visit?
No. The value comes in the written report after the appraiser finishes the research.
Questions About the Appraisal?
If you're buying or refinancing in North Carolina or South Carolina and want to understand how the appraisal could affect your loan, I'm glad to walk you through it. Schedule a consultation, start your application or read client reviews.
Paul Mattos
Mortgage Broker | Refine Mortgage
Carolina Home Financing
NMLS# 2339069 | Licensed in NC and SC
Call or text: 980-221-4959
Email: paulm@refinemortgage.net
Refine Mortgage Inc. | NMLS# 2417960 | Equal Housing Lender. This article provides general educational information and is not a commitment to lend or a rate quote. Appraisal requirements, validity periods and alternatives vary by lender and loan program and can change. Financing is subject to credit, income, assets, appraisal, title and underwriting requirements. Not all applicants will qualify.
