Understanding the Role of a Home Appraiser in the Loan Process

Understanding the Role of a Home Appraiser in the Loan Process - 1 (800) 880-7954

A home appraiser plays a crucial role in determining the fair market value of your property, which can significantly impact your chances of securing a home loan or refinancing with top mortgage lenders. To ensure a smooth appraisal process, it’s important to be aware of the key factors that appraisers consider. In this article, we will explore the various aspects you need to know before an appraiser evaluates your prospective or existing home.

Appraisers Work for the Lender

It’s essential to remember that appraisers are employed by the bank or lender approving your loan, rather than working in your favor. Their primary objective is to provide an unbiased assessment of your property’s value, ensuring the lender’s interests are protected.

Size and Square Footage

Appraisers take into account not only the number of bedrooms and bathrooms but also the overall square footage and lot size. Additionally, the proportion of your lot occupied by the home can influence the final appraisal. It’s important to note that even homes with the same number of bedrooms may receive different appraisals if their overall sizes differ.

Importance of Location

Location plays a crucial role in the appraisal process. Factors such as living on a busy street, proximity to desirable amenities, neighborhood school districts, crime rates, and the type of neighboring properties (single-family homes or apartments) can impact your home’s value.

Consideration of Comparable Homes

Appraisers assess the value of your house by examining sales data of similar properties in your neighborhood. Homes with comparable square footage and bedrooms provide historical reference points for determining your home’s worth.

Distinction from Home Inspection

It’s crucial to differentiate between a home appraisal and a home inspection. While appraisers focus on evaluating your property’s value, home inspectors inspect the home’s condition, identifying any potential issues that need to be addressed before listing it for sale or finalizing a sale with potential buyers.

Impact of Home Improvements

Outdated features, such as kitchens or bathrooms, can negatively impact your home’s final appraisal. Upgrading these features to modern standards can enhance your home’s desirability and potentially increase the appraiser’s assessment. However, it’s important to note that the amount you invest in renovations may not necessarily translate into a dollar-for-dollar increase in your appraisal value.

Requesting a Second Opinion

Although the final decision rests with the bank or lender, you have the option to request a second appraisal from another appraiser. Consulting with your real estate agent for an estimate before the bank’s appraiser arrives can help you anticipate and manage potential surprises.

Allowing Appraisers to Work

Unlike home inspectors, appraisers prefer to conduct their assessments without being accompanied by homeowners. Instead of following them around, it’s best to provide a list of specific issues or renovations at the beginning of the appraisal and allow them to carry out their job independently.

Impact of Water Damage

Significant water damage or mold issues can significantly reduce your home’s appraisal value. If appraisers observe severe water problems, it may signal potential costly repairs, leading to a lower appraisal estimate.

Considering Appraisal Fees

Appraisal services are not typically free, and the bank or lender may charge you for the appraisal as part of the closing costs for your loan. When preparing for a home purchase or refinance, it’s important to factor in these fees alongside other financial considerations.

Challenging an Appraisal

While challenging an appraisal can be challenging, it’s not impossible. Review the appraiser’s report and check for potential errors, such as missing bedrooms or inaccurate bathroom counts. If you believe certain factors were overlooked, you may have grounds to challenge the appraisal. However, it’s important to note that successfully overturning an appraisal decision can be difficult.


Navigating the home loan or refinancing process can be overwhelming, especially when it comes to understanding the role of a home appraiser. By being aware of the factors appraisers consider and seeking guidance from your real estate agent or lender, you can better prepare and address any concerns during the appraisal process.