What Is a Home Appraisal?

Your offer was accepted. The inspection went fine. And now a stranger is going to spend forty minutes walking through the house deciding what it’s worth, and their number gets a vote in whether your loan works.

That’s an unnerving thing to be told a week into escrow, especially since you’ve already paid for it. So here’s what the appraiser is doing, why your lender insists on it, and what happens if the number isn’t the one you were hoping for.

What an appraisal actually is

An appraisal is an independent, licensed appraiser’s written opinion of what your home is worth on the open market today.

It exists for your lender, not for you. When a bank lends you $600,000 against a house, the house is the collateral. If everything went wrong and the loan had to be recovered through a sale, the bank needs to know the property could cover it. The appraisal is how they confirm they’re not lending $600,000 on something the market says is worth $520,000.

You’ll get a copy of the report; that’s your right, and it comes to you before closing. But the appraiser doesn’t work for you, and can’t be contacted by you or your agent during the assignment. Orders route through an independent channel, walled off from the loan officer and the agents, because the last housing crisis was made worse by valuations that bent toward whatever number the deal needed.

What the appraiser is really doing

Most of the work isn’t the walkthrough. It’s the comparison.

On site, the appraiser measures the home, notes the bedroom and bathroom count, records condition and quality of construction, photographs the interior and exterior, and flags anything that materially affects value or safety. On a typical single-family home that visit runs thirty minutes to an hour.

Then they go back to the desk and find comparable sales. Comps are recently closed sales of similar homes nearby, ideally within the last three to six months and within a half mile in a dense area like Los Angeles. Each one gets adjusted for its differences from your house: a third bathroom you don’t have, a pool, an extra garage space, a remodeled kitchen, four hundred more square feet, a busier street. Every difference becomes a dollar adjustment, and the adjusted comps bracket a value.

That’s the whole method. It’s why an appraisal in a tract neighborhood where six near-identical homes sold last quarter is straightforward, and an appraisal on a one-of-a-kind hillside property with no real comps is genuinely hard.

What it costs and when you pay

You pay for it, and it’s ordered shortly after your contract is signed.

A standard single-family appraisal runs roughly $350 to $550 in most of the country, higher for large, complex, or rural properties. Government loans cost more because the scope is broader: FHA and USDA appraisals commonly land between $400 and $900, and VA appraisals are typically the priciest of the group. Los Angeles generally sits at the upper end of any range you read nationally.

Some lenders collect the fee by card when the order goes in; others let it show up as a line item among your closing costs. Either way it’s your money, it’s spent before you know whether the deal closes, and it isn’t refundable if you walk away. From order to final report, plan on one to two weeks.

It is not the same as your inspection

These get confused constantly, and the distinction is simple.

The inspection is yours. You hire the inspector, the report comes to you, your lender never sees it, and it’s about the physical condition of the house. The appraisal is the lender’s. It’s about value.

An appraiser is not crawling the attic or testing the furnace. A home can appraise at full price with a roof that has two years left in it. You need both, and only one of them is looking out for your future repair bills.

Sometimes there isn’t one

This surprises people, so know it before you budget for the fee.

On a meaningful share of conventional loans, the automated underwriting system comes back and accepts the value with no traditional appraisal at all. Fannie Mae calls this value acceptance; it was called an appraisal waiver until that term was retired in September 2025. The system compares your property against a database of millions of past appraisals and decides it already has enough data to be confident.

Eligibility has widened. For purchase loans on primary residences and second homes, value acceptance now reaches up to 90% loan-to-value, and a middle option called value acceptance plus property data, where someone does a data-collection visit but no full appraisal, goes higher still.

I can’t promise you’ll get one; it comes from the automated findings once your file is submitted, not from anything we can request. But it saves you the fee and roughly a week of calendar, so ask me what your findings came back with.

When the number comes in low

It happens, and it isn’t the end of the transaction.

Your loan is based on the lower of the purchase price or the appraised value. If you’re buying at $700,000 and it appraises at $675,000, the lender lends against $675,000, and that $25,000 gap has to come from somewhere: a renegotiated price, more cash from you, a split down the middle, or a cancellation under your appraisal contingency with your earnest money returned.

There’s one more option people don’t know they have. You can request a reconsideration of value, one per appraisal, before closing, if you believe the report contains factual errors, leaned on poor comparable sales, or was affected by prohibited bias. It has to be specific and documented rather than a disagreement with the total, and your lender is required to tell you how to file one when the report is delivered. Better comps do sometimes change an outcome.

The bottom line

An appraisal is an independent opinion of value that protects your lender’s position, costs a few hundred dollars, takes a week or two, and speaks to value rather than condition. Some conventional loans skip it entirely through value acceptance. If the number comes back short, you have real choices, including a documented reconsideration of value. And don’t read a low figure as a verdict on your judgment. It’s one professional’s supported opinion, written on a deadline, about a house you’ll likely own for a decade.

Ready to learn more?

If you’re getting ready to write an offer or your appraisal is about to be ordered, I’d be honored to walk you through what to expect, and what your options are if the number comes back differently than you hoped.