How much does an appraisal cost?

Fees vary by area and property type and are usually a few hundred dollars for a single-family home. The buyer typically pays at or before closing.

Can I use the seller's appraisal?

Generally no. Lenders order their own appraisal through an independent process so the valuation isn't influenced by either party.

Do cash buyers need an appraisal?

No lender means no required appraisal, but many cash buyers still order one to avoid overpaying.

Buying & closing

Appraisal

Also called home appraisal, property appraisal

In short

An appraisal is a licensed appraiser's independent estimate of a property's market value. Lenders require one to make sure the home is worth at least the amount being borrowed.

Who orders it

The lender

Who pays

Usually the buyer

Based on

Recent comparable sales

If it's low

Renegotiate or cover the gap

How an appraisal works

The appraiser inspects the property, notes its size, condition and features, and compares it with recent sales of similar nearby homes. The result is a written report with an opinion of value. The lender uses it to set the maximum loan-to-value ratio for the loan.

When the appraisal comes in low

If the value is below the contract price, the lender lends against the lower figure. You can ask the seller to reduce the price, pay the difference in cash, split it, challenge the report with better comparables, or cancel if you have an appraisal contingency.

Appraisals on distressed properties

Homes with major damage may not meet lender condition standards, which can block conventional or FHA financing. Renovation loans such as the FHA 203(k) use an "as-completed" value instead. Investors also rely on appraisals or broker opinions to estimate after repair value.

Example

Covering an appraisal gap

A buyer contracts to buy a home for $320,000 with a loan for 90% of value. The appraisal comes in at $310,000, so the lender will lend 90% of $310,000, or $279,000, instead of $288,000. The buyer now needs $41,000 down instead of $32,000. They negotiate the price down to $314,000 and pay the remaining gap in cash.

Appraisal vs. Comparative Market Analysis (CMA)

Appraisal

An appraisal is a licensed appraiser's independent estimate of a property's market value. Lenders require one to make sure the home is worth at least the amount being borrowed.

Comparative Market Analysis (CMA)

A comparative market analysis (CMA) is a real estate agent's estimate of a home's value based on recent sales, pending sales and active listings of similar nearby properties.

The differenceAn appraisal is a formal valuation by a licensed appraiser, used by lenders. A CMA is an informal estimate by a real estate agent, used to price a listing or an offer.

Frequently Asked Questions

Related terms

Home InspectionBuying & closingA home inspection is a professional visual examination of a home's structure and systems, ordered by the buyer to find defects before closing. It usually happens during the inspection contingency period.Loan-to-Value Ratio (LTV)Mortgages & financingLoan-to-value ratio (LTV) compares the size of a mortgage with the property's value. A lower LTV means more equity and less risk for the lender, which often brings better loan terms.ContingencyBuying & closingA contingency is a condition in a purchase contract that must be met for the sale to go through. If it isn't met by its deadline, the buyer can usually cancel and keep their earnest money.After Repair Value (ARV)InvestingAfter repair value (ARV) is the estimated market value of a property once planned repairs and renovations are complete. Investors use it to decide how much to pay for a fixer-upper.Mortgage Pre-ApprovalMortgages & financingA mortgage pre-approval is a lender's conditional commitment to lend up to a set amount, based on verified income, assets and credit. Sellers often expect one before accepting an offer.FHA 203(k) LoanMortgages & financingAn FHA 203(k) loan is a government-insured mortgage that combines a home's purchase price and the cost of repairs into one loan. It lets owner-occupants buy and fix up homes that need work.Private Mortgage Insurance (PMI)Mortgages & financingPrivate mortgage insurance (PMI) protects the lender, not the borrower, if a borrower defaults on a conventional loan. It is usually required when the down payment is less than 20% of the home's value.Closing CostsBuying & closingClosing costs are the fees and prepaid expenses paid to complete a real estate purchase, beyond the price and down payment. Buyers typically pay about 2% to 5% of the loan or purchase price.

Learn more in the knowledge base

Inspection, Appraisal and Underwriting: Clearing Contingencies Before ClosingGuide · 7 min readOnce your offer is accepted, a short window opens to check the home's condition, its value and your loan. This guide explains how the inspection, appraisal, underwriting and title review run side by side, and how to clear each contingency before its deadline.The Home Buying Process, Step by StepGuide · 5 min readBuying a home follows a predictable sequence, even though every transaction has its own wrinkles. This guide walks through each step in order, explains what you decide at each one and points to the detailed guide for every stage.How to Finance a Foreclosure or Distressed PropertyGuide · 7 min readDistressed properties are harder to finance than move-in-ready homes. Condition, timing and the seller's terms all limit which loans will work. This guide matches financing options to each kind of distressed purchase and explains the trade-offs.

A B C D E F H J L M N O P Q R S T Z

Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.