How long does an appraisal take and what happens next?

A neighborhood in San Diego

Buying a home can be stressful, especially once the appraisal process begins. Learn what a home appraisal is and how the results can affect your closing.

By Rachel Maday

Appraisals are a necessary part of the homebuying process. But that doesn’t make them any less stressful for homebuyers, especially if you’ve never been through one before. If you have an appraisal coming up, you likely have plenty of questions. How long does an appraisal take? How much does an appraisal cost and what happens after it’s complete? In this article, we’ll answer these questions and more about the appraisal process so you can remain cool and collected until closing.

What you’ll learn

  • What happens during an appraisal
  • How long an appraisal takes, from the walkthrough to the report
  • What factors affect appraisals, both negatively and positively
  • Who orders the appraisal and who pays for it (and the average cost)
  • What to do if you face a low appraisal when buying a home
  • What to do as a homebuyer to prepare for the appraisal process

Home appraisal timeline

A home appraisal comes toward the end of the homebuying process. Here’s a summary of a standard timeline homebuyers can expect.

  1. Find a real estate agent
  2. Obtain mortgage loan  pre-approval or get pre-underwritten
  3. Look for a home
  4. Make an offer
  5. Obtain a home inspection
  6. Obtain an appraisal
  7. Underwriting and loan approval
  8. Obtain insurance
  9. Close
  10. Get the keys! 

When does a home appraisal take place?

An appraisal is a valuation of the property you’re buying and usually takes place after an offer has been made and an inspection has been completed. It’s one of the final steps of the homebuying process.

What happens during an appraisal? 

During a home appraisal, a licensed appraiser inspects the property to determine its value. 

Several factors are taken into consideration, including:

  • Overall condition of the property
  • Upgrades or additions
  • Quality of roofing, foundation, plumbing, and HVAC
  • Lot size and landscaping
  • Number of bedrooms, bathrooms, and fireplaces
  • Nearby “comps” or recently sold properties

How long does an appraisal take?

The appraisal walkthrough can take anywhere from 20 minutes to several hours, depending on the size of the home and its condition. An appraiser may also view nearby comparable homes from street level. The appraiser then gets started on putting together the appraisal report.

How long does it usually take to get the results of an appraisal?

Waiting for the results of an appraisal is the longest part of the appraisal process. While some reports only take a couple of days to complete, others can take up to one week.

Why does a home appraisal take so long?

For anxious homebuyers, the home appraisal process can seem drawn out. Waiting a few days for the report is rarely a cause for concern, however. In most cases, a delayed appraisal is often the result of a backlog resulting in very busy appraisers, especially in a hot market. There simply aren’t enough appraisers to keep up with the number of homebuyers looking to close on a property. If you’re nervous about a delayed appraisal, patience is usually the best approach.

What hurts a home appraisal?

A low appraisal can lead to chaos at closing. When an appraisal comes in lower than expected, homebuyers usually have to come up with more cash for their down payment to appease their lender. Here are a few scenarios that can increase the likelihood of a low appraisal. 

Outdated appliances, systems, and interiors

Out of date appliances (like a refrigerator), systems (like the electrical), and interiors (like flooring) can signal a lack of maintenance from previous owners and serve as a red flag to an appraiser. An outdated home is also less appealing to buyers, decreasing its overall value.

Unsound materials or structure

Older homes can include lead paint or other hazardous materials. They may also have been built using construction methods that are no longer up to code. A home with worn out or damaged construction elements will almost always be appraised on the low end. 

Incomparable home

Is the home a bit unique or in a rural location? If so, it can be difficult to find similar homes to compare to the home in question. In this situation, appraisers usually have to look in other neighborhoods for comparable sales or end up giving a valuation range instead of an exact number. This could lead to an appraisal that’s lower than expected.

What adds value to a house?

There are a few features homebuyers can look for that often lead to higher appraisal values. 

Features that generally increase a home’s value include:

  • Permitted additions
  • Updated kitchens and bathrooms
  • Energy efficient appliances
  • Smart home technology
  • Landscaping
  • Finished basements
  • High-end materials and finishes

Who orders the appraisal and when?

The mortgage lender orders the appraisal, either directly from an appraiser or through an appraisal management company.

How much does an appraisal cost and who pays?

While the mortgage company arranges the appraisal, the buyer is responsible for the cost. Fees depend on the size and location of a property but typically fall between $200 and $600. The national average is around $335.

What happens after the appraisal is complete? 

Once a home appraisal is complete, the appraiser sends the final report to the mortgage lender. If the home is appraised at or above the home’s purchase price, the down payment and loan amounts in the accepted offer remain the same.

But if the appraisal comes in below purchase price, there are decisions to make. 

A homebuyer’s options when faced with a low appraisal include:

  • Appeal the appraisal
  • Negotiate with the seller
  • Restructure the loan terms
  • Switch mortgage lenders

Another option is to increase the down payment. For example, let’s say you put in an offer for a home at $600,000. You plan on putting 5% down. This equates to a $30,000 down payment and a $570,000 loan. 

But if the appraisal value comes back at $550,000, you’re stuck with a maximum loan amount of $522,500 (loans can only be 95% of an appraised value or the purchase price, whichever is lower). 

In this scenario, you would have the option of raising your down payment to lower the amount you need to borrow to come in at less than the new max. It’ll mean coming up with more money up front, but it’s a simple way to get past an appraisal that comes back lower than anticipated.

How can I prepare for an appraisal?

As a homebuyer, there’s very little responsibility on your end for completing an appraisal. It’s ordered and arranged by the lender, you do not need to be present during the walkthrough, and your lender will inform you of the report (though you should receive your own copy to inspect). 

You are responsible for the cost, which may be wrapped up into closing costs or paid separately before closing, depending on the lender. The most important tip to remember is to remain patient during the process and thoroughly inspect the report once it comes in.

Closing thoughts

A low appraisal can put a wrench in your financial plans when buying your dream home. While there is very little you can do as a homebuyer to prevent a low appraisal, you do have options should you face one.

Learning more about the appraisal process and knowing answers to some of the basic questions we’ve covered here will help you understand your obligations and options.

FAQ about home appriasals

How long does it usually take to get the results of an appraisal?

It can take up to one week to get the results of an appraisal.

How long does a home appraisal walkthrough take?

A home appraisal walkthrough can take up to three hours.

What hurts a home appraisal?

Outdated and unsound homes can lead to a low appraisal. A property that’s difficult to compare can also come in below expected value.

What adds value to a house?

Additional square footage, updated bathrooms and kitchens, high-end materials, and landscaping can all add value to a home.

About the author: Rochel Maday is a freelance writer specializing in finance and real estate copy. When she’s not helping her clients build relationships with their audiences through authentic content, she can be found watching documentaries (way too) late into the night.

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