What to Expect During the Home Appraisal Process

Understanding what happens during home appraisal helps buyers and sellers prepare for one of the most critical stages in a real estate transaction. The appraisal determines the property's fair market value based on condition, size, updates, and comparable sales. It protects lenders from risk and ensures that the loan amount aligns with the property’s actual worth. Knowing what to expect makes the process more transparent, more predictable, and easier to navigate.

This guide outlines each stage in detail and explains how an appraiser evaluates a property.

Lenders use an appraisal to confirm that the property supports the proposed loan amount. The appraiser serves as a neutral third party, independent of both buyer and seller. Their report becomes part of the lender’s underwriting process and influences final loan approval.

A buyer purchasing with financing will encounter the appraisal after the offer is accepted. Sellers also feel the impact because the appraised value must match (or come close to) the contract price. This step helps maintain stability in the housing market by preventing inflated valuations and ensuring fair outcomes for all parties.

Once the lender orders the appraisal, the appraiser contacts the listing agent or seller to schedule a visit. Most appointments take place within one to two weeks, depending on availability and property type. Complex homes, rural parcels, and unique architectural designs may require additional time.

During scheduling, the appraiser gathers preliminary information, such as access instructions, occupancy details, and any special considerations, including outbuildings or additions. This preparation helps the appraiser understand what will be evaluated onsite and how much time is required for the inspection.

The onsite visit is a key step in what happens during home appraisal. The appraiser conducts a detailed walkthrough to document the property's physical condition. This includes evaluating:

• Square footage and layout – The appraiser measures the home, verifies the number of bedrooms and bathrooms, and notes how the rooms are connected.
  
  
• Interior condition – They observe flooring, cabinets, countertops, appliances, windows, and mechanical systems.
  
  
• Exterior features – The inspection includes the roof, siding, foundation, drainage, and overall structural integrity of the property.
  
  
• Updates and remodels – Recent improvements, such as kitchen upgrades or new HVAC systems, are documented.
  
  
• Lot characteristics – The size, topography, landscaping, and outdoor structures influence value.

The onsite portion usually lasts 20 to 60 minutes, depending on the size and complexity of the home. The goal is to gather objective data without making subjective design judgments.

The next phase takes place in the appraiser’s office, where research on comparable sales begins. Recent sales of similar homes in the area serve as the foundation for the valuation. The appraiser selects properties based on:

• Similar square footage
• Comparable lot size
• Equivalent age and construction type
• Similar level of updates
• Proximity to the subject property
• Sales within the last three to six months, when possible

Adjustments are then made to account for differences. For example, if a comparable property has a finished basement and the subject property does not, an adjustment is made to reduce the comparable’s value for accurate comparison.

The appraisal also reflects current real estate trends. A fast-moving market with rising prices may influence valuation differently than a market adjusting to slower sales. The appraiser reviews:

• The number of active and pending listings
• Seasonal demand patterns
• Price trends in the neighborhood
• Inventory levels and months of supply

These factors help support the appraiser’s conclusion and justify the selected value range. Understanding these influences is crucial to comprehending what happens during a home appraisal in a dynamic market.

Once the analysis is complete, the appraiser produces a detailed written report that follows standardized guidelines. The report includes:

• Property description and photos
• Comparable sales grid with adjustments
• Market analysis and neighborhood overview
• Notes on condition and repairs
• Final opinion of value

Lenders review this document closely during the underwriting process. The buyer may receive a copy once the lender has finished its internal review. Sellers often see the appraisal only if issues arise, such as a valuation that comes in lower than the contract price.

A significant part of understanding what happens during a home appraisal involves preparing for outcomes that differ from the contract price. When the appraisal meets or exceeds the agreed-upon amount, the transaction typically proceeds without changes.

If the appraisal comes in lower, the transaction requires reevaluation. Common outcomes include:

• Renegotiation of the purchase price
• The buyer covers the difference in cash
• Contract cancellation, depending on financing contingencies

In rare cases, an appraisal may be challenged if factual errors are found. However, challenges must be supported with legitimate market data and cannot rely on personal opinion.

Homes with unusual features may require specialized methods for their maintenance. Properties with custom architecture, large acreage, waterfront locations, or significant luxury upgrades may not have direct comparable sales. The appraiser may use broader geographic searches or apply cost-based valuation methods that estimate the cost of rebuilding the home.

Examples include:

• Multi-level contemporary designs in hillside areas
• Architect-designed homes with niche materials
• Large estate properties with guesthouses
• Homes with extensive smart-home systems or high-end finishes

These appraisals often take additional time and require more documentation to support the final value.

Sellers can create a smooth appraisal experience by ensuring the appraiser has unrestricted access to the home. A clean and organized environment supports efficient documentation, although it does not directly influence value. Providing a list of upgrades with installation dates can help the appraiser verify improvements that impact valuation.

Information that may be useful includes:

• Roof replacement dates
• HVAC installation receipts
• Notes on remodeled kitchens or bathrooms
• Structural repairs or foundation work

Providing accurate data helps eliminate uncertainty and enables the appraiser to produce a precise report.

Christensen Collective offers in-depth guidance to help you understand the appraisal stage and prepares you for every step of the buying or selling journey. Reach out today to work with professionals who know how to support you through a successful real estate experience.