What Is a Home Appraisal and What Happens If It Comes In Low?
A low appraisal can kill a home purchase or refinance. Here's what appraisers look for and what your options are.
General information, not professional advice — see terms of use.
A home appraisal is an independent assessment of a property's market value, required by lenders for most mortgage transactions.
What appraisers evaluate:
- Comparable sales ('comps'): Recent sales of similar nearby homes — the most important factor
- Property condition: Age, updates, necessary repairs
- Size and layout: Square footage, bed/bath count, lot size
- Location: Neighborhood quality, proximity to amenities, flood zone
- Unique features: Pool, garage, view, finished basement
Cost: $400–$700 for most single-family homes. Takes 30–60 minutes on-site plus 3–7 days for the report.
What happens if the appraisal comes in low: In a purchase, the lender loans only based on appraised value. If you're buying for $350,000 and it appraises at $325,000, your options are:
1. Renegotiate the purchase price down
2. Pay the difference in cash (appraisal gap)
3. Challenge the appraisal with additional comparable sales
4. Walk away (if you have an appraisal contingency)
Follow-up questions
Can you dispute a home appraisal?
Yes — through a Reconsideration of Value (ROV). Provide the lender with additional comparable sales the appraiser may have missed. Your real estate agent can help identify these comps. Appraisers are not obligated to change their value, but overlooked sales can result in a revised report.
Do appraisers look at the inside of a house?
Yes — a full appraisal requires interior inspection. The appraiser notes room condition, visible damage, updates, and construction quality. Prepare by making all areas accessible, ensuring utilities are on, and fixing obvious issues (broken windows, visible water damage) before the appraisal.
How is an appraisal different from a home inspection?
An appraisal determines market value for the lender. A home inspection assesses the physical condition of the home for the buyer. An appraisal is required by lenders; a home inspection is typically optional but strongly recommended. Both should be done before closing.
More real estate answers
This page is general information, not professional advice, and it may not reflect the latest rules where you live. For your own situation, talk to a qualified adviser. Spotted an error? Email per@upperia.se and we will fix it.