What Is a Property Appraiser?

If you’re looking to buy or sell a house, or refinance a mortgage, you may need a property appraiser to close the deal. Real estate appraisers assess a property’s location, square footage and more to determine its market value. Learn more about appraisers and their role in mortgage transactions.

What does a real estate appraiser do?

A real estate appraiser conducts an objective evaluation of a property to determine its value, documenting their findings in an appraisal report. Mortgage lenders typically require homebuyers to pay for a home appraisal during the closing process.

Let’s take a closer look at what real estate appraisers do for each of the main parties in a real estate transaction:

→ Buyer: An appraiser evaluates the property a homebuyer is interested in purchasing or refinancing, assessing factors like neighborhood and property size to determine its value. This helps ensure the buyer doesn’t borrow more than the home’s worth.

→ Seller: Real estate appraisers provide an independent analysis of a home’s value, helping sellers set a price for the home that’s realistic and competitive. A home appraisal can also highlight improvements that could increase the property’s value before the seller puts it on the market.

→ Lender: An appraiser helps determine a home’s value, which lenders use to confirm that they aren’t lending out more than the property is worth. It’s a way for lenders to conduct due diligence and ensure they are making a sound investment.

What do property appraisers look at?

Here are some of the factors an appraiser will review when conducting their assessment:

→ Location. Appraisers will evaluate the property’s location, including the quality of the school system, crime rates, access to public transportation and the general upkeep of the neighborhood.

→ Recent home sales. Using comparative market analysis, real estate appraisers will assess the sales price of similar homes nearby.

→ Home specifications. Both the interior and exterior of the house will be under a microscope — everything from floor plans, square footage, upgrades, energy-efficient features — to curb appeal.

→ Special features. Appraisers will consider any extra property features, like pools and decks, during the assessment process. Evaluating these features may increase the appraisal fee.

→ Market condition. A property appraiser will also consider the overall market and housing trends in your area when completing their report.

Types of appraisals

A property appraiser may use one of the following approaches when conducting the home appraisal:

Additionally, the appraiser may evaluate your property in one of the following ways:

→ Traditional appraisal. An appraiser visits the house to conduct a thorough, on-site assessment.

→ Desktop appraisal. The appraiser evaluates the property based on publicly available information and doesn’t conduct an in-person visit. Lenders usually won’t accept this type of appraisal.

→ Hybrid appraisal. Hybrid appraisals combine the options above. They typically involve hiring two appraisers, one to complete an on-site assessment and another to analyze the data.

How much does a real estate appraisal cost?

The average cost of a real estate appraisal varies by location and property type, but generally ranges from $300 to $500. Multifamily home appraisals tend to cost more, since their assessments are more complex than single-family homes. Multifamily property appraisals can cost up to $1,000.

Prices can also vary depending on the type of appraisal you get. Desktop appraisals can cost anywhere from $75 to $200, and hybrid appraisals can range from $250 to $375. Since government-backed loans, including FHA and VA loans, have specific appraisal requirements, they come with a higher price tag, typically $400 to $900 or more. Homebuyers typically pay for appraisals as part of their closing costs.

How to find a real estate appraiser

The mortgage lender will typically hire the appraiser on the homebuyer’s behalf. If you need to find an appraiser yourself, ask friends, family or your real estate agent for referrals. It’s a good idea to shop around and compare reviews, rates and services of a few different appraisers before choosing one.

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Is hiring a property appraiser worth it?

For home sellers, getting an appraisal might not be worth it since the buyer’s mortgage lender will likely require one. However, getting an appraisal can help sellers set the right price from the get-go. Additionally, homeowners may need to hire an appraiser as part of the refinance process. Like most professions, appraisers have varying skills and experience. Here are some questions to ask an appraiser before hiring:

• What are your qualifications?
• How many years of experience do you have?
• Have you appraised other homes in my area?
• What are your rates?
• Can you share your references or reviews?

What happens if the appraisal is lower than the offer?

Appraisal problems are one of the most common causes of closing delays. In 2023, 59% of the transactions that fell through because of an appraisal were due to the appraised home value, according to a survey from the National Association of Realtors (NAR). If an appraisal comes back lower than the purchase price, the buyer may need to negotiate a lower price with the seller, increase their down payment, appeal the appraisal or walk away.