You might think buying a home involves a lot of waiting. You may wait for pre-approval, the results of the home inspection, underwriting and more. As part of the homebuying process, you may also wait for the results of an appraisal. (Getting the results of a real estate appraisal may take less time than you think.)

Knowing the exact process can help you learn more about how appraisers arrive at assessing the fair value of homes. Learning about appraisals in depth might even help you increase the value of your home as a seller. 

So, how long does an appraisal take and what is the exact process? We’ll discuss these topics below. 

What is the Home Appraisal Process?

Let’s walk through how the home appraisal process works, step by step.  

What is an Appraisal?

An appraisal determines the fair market value of a home and a professional, licensed third-party appraiser completes the assessment. A homeowner or prospective buyer can get a general home appraisal to help determine a price for the home or for tax assessment purposes. 

A home appraisal affects how much a bank will loan a buyer for their mortgage. You cannot choose your appraiser when you get a mortgage — your lender will use an appraisal management company (AMC) to order an appraisal. 

It’s a common misconception that local lenders have a different level of access to appraisers, but this isn’t true. 

Also note that an appraisal differs from an inspection. An appraisal determines a home’s value, while an inspection determines its condition. A home inspection offers more color on the condition of portions of the home — including major home systems, the roof and foundation.

What Does an Appraiser Do?

An appraiser usually does an on-site inspection to evaluate the current value of a property. Most of the time, appraisers complete on-site inspections. During on-site inspections, they evaluate the current real estate market, consider similar properties in the neighborhood and write up a report. The appraisal report specifies what the bank can loan for someone to purchase that particular property and why. 

Site Inspection Scheduling

The lender assigns an AMC to handle scheduling and an AMC orders the appraisal on behalf of the lender. Sometimes a lender orders the appraisal directly from an appraiser.

Appraisal Walkthrough 

In an on-site appraisal, the most common type of appraisal, the appraiser physically visits the property to conduct a visual inspection. They may walk through each room of a home to assess the size and condition, evaluate the exterior, record the layout and acreage of the property and take note of the square footage and number of rooms. 

The appraiser may also take any renovations into consideration, such as the addition of a new kitchen.

Comparison with Other Properties

Real estate appraisers use comparable sales to compare the home to recently sold properties in the area that have similar characteristics (such as size and amenities). Comparable homes, or a list of recent home sales, help appraisers find the fair market value of a home. 

Preparing the Report

At the conclusion of an appraisal, the appraiser prepares an appraisal report. The Uniform Standards of Professional Appraisal Practice says that appraisal reports can come in three written formats: self-contained, summary and restricted use.

  • Self-contained appraisal report: A self-contained appraisal report offers comprehensive coverage of information contained within the report with few references to files outside the report. 
  • Summary appraisal report: A summary appraisal report summarizes the data and analyses used in the assignment. 
  • Restricted-use appraisal report: The appraisal file for a summary or restricted-use appraisal report contains backup data and/or analyses that would be presented in a self-contained appraisal report for a client who is the sole user of the report. 

In addition, note that Fannie Mae and Freddie Mac, which are government-sponsored enterprises (GSEs), set exact standards for home appraisals. Fannie Mae and Freddie Mac do not directly offer mortgage loans. They buy mortgages from banks, credit unions and other financial institutions so these financial institutions can lend more money to homeowners. 

The uniform appraisal dataset (UAD), a standardized industry dataset for appraisal information through the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac, provides consistent data standards for the loans the GSEs purchase. It ensures accuracy of both the appraisal and an assessment of the marketability of the property. 

Fannie Mae and Freddie Mac standardize data to define the property, which helps lenders understand specific property characteristics, verify property eligibility and determine overall collateral risk.

How Long Does an Appraisal Take?

An appraisal typically takes a few days to a week to finish, but certain factors impact the amount of time it takes to complete. If the appraiser has a busy schedule in a particularly hot market or if a particular property has many complexities or is located in a particular area (such as a rural area) it may take longer. 

How to Prepare for a Home Appraisal: For Sellers

Wondering how to get ready for a home appraisal? Take a look at several things you can do to get ready: 

  • Gather documents for the home appraiser. Collect information about property size and proof of any home improvements, complete with receipts.
  • Clean up and declutter. Fix small things, such as repairing dented drywall or  replace a broken section of banister on the stairwell. 
  • Focus on the exterior. Pay attention to curb appeal. Landscaping, raking sticks, clearing weeds from your yard and cleaning the gutters can make a difference.
  • Update amenities. Look critically at major appliances, detailed finishes and other amenities before the appraisal and make any upgrades that you think can help add to your home value.

Any maintenance, finishing and repairs could potentially help the selling price of a home, though you don’t always have control over certain factors, such as the particular market conditions when you buy. 

Frequently Asked Questions About Home Appraisals

Can home appraisals be done virtually?

Yes. Homeowners can showcase their home online while an appraiser does a drive-by appraisal — an analysis of the exterior of the property. Drive-by appraisals, also called exterior appraisals, also rely on recent MLS listings. The MLS is a database that shows properties for sale among cooperating real estate brokers. 

In addition, desktop appraisals are also here to stay. Desktop appraisals involve property valuation completed at the appraiser’s desk using tax records and information listed on the multiple listing service (MLS) only.

Who pays for the home appraisal?

Buyers typically pay for appraisals, and the cost can vary depending on the mortgage lender. Most of the time, it’s paid when the appraisal is conducted — prior to closing.
Need a knowledgeable partner on your side when navigating mortgage rates, determining the best purchase price on your dream home and more? Let Morty guide you through the exact process.