You've found the perfect house. Your offer got accepted. You're already planning where the couch will go. Then you hear those words that make every buyer's stomach drop: "We're waiting on the appraisal."
Suddenly, this person you've never met holds tremendous power over whether your deal actually happens. But what exactly does an appraiser do? And why does it matter so much whether you're buying, refinancing, or just curious about your home's value?
Let's break down how appraisers actually determine what your home is worth—and why understanding this process can save you thousands of dollars and a whole lot of headaches.
The Appraiser's Mission: Finding the Sweet Spot
Here's the thing about appraisers: they're not trying to help you or hurt you. They work for the bank, and their job is pretty straightforward—figure out what the property is actually worth so the lender doesn't loan more money than they could recover if things go sideways.
Think of an appraiser as a financial detective. They're gathering clues from the neighborhood, measuring rooms, taking photos, and comparing your property to similar homes that sold recently. The goal? Landing on a number that reflects what a willing buyer would pay a willing seller in the current market.
Most appraisers follow something called the Uniform Residential Appraisal Report (URAR), which gives lenders a standardized way to evaluate properties. This keeps things consistent, whether you're buying a bungalow in Baltimore or a ranch house in Phoenix.
Purchase Appraisals: When You're Buying a Home
When you're buying a house, the appraisal happens after your offer gets accepted but before closing. The lender orders it, you usually pay for it (typically between $400 and $600), and the appraiser shows up to do their thing.
Here's what they're looking at:
The property itself. They'll walk through every room, measure the square footage, check out the condition of major systems like HVAC and plumbing, and note any obvious issues. That crack in the foundation? They're writing it down. The brand-new kitchen? Also noted.
Comparable sales. This is the heavy lifting. Appraisers look for homes that sold recently (usually within the last six months) in your area that match your property in size, age, condition, and features. They call these "comps." If your house has four bedrooms and a pool, they're looking for similar homes with four bedrooms and pools.
Location factors. Is the house on a busy street? Near good schools? In a neighborhood that's trending up or down? All of this shapes the final number.
The appraiser then makes adjustments. If one comp has a finished basement and yours doesn't, they'll subtract value. If your house has a two-car garage and the comp only has a one-car, they'll add value. It's a balancing act that requires both data and professional judgment.
Refinance Appraisals: Different Motivation, Similar Process
When you're refinancing, the appraisal process looks pretty similar on the surface—same walkthrough, same comps, same measuring tape. But the stakes feel different.
With a purchase, there's a transaction happening. Someone agreed to pay a certain amount, and the appraiser is checking whether that number makes sense. With a refinance, no buyer is validating the price. You're just trying to establish current market value so you can adjust your loan terms.
The appraiser still uses recent sales to determine value, but they might give a bit more weight to the condition of your home and any improvements you've made. That kitchen renovation you finished last year? It could actually move the needle here.
One thing that's nice about refinance appraisals: if the number comes in lower than you hoped, it's disappointing, but your deal doesn't fall apart. You just might not get the loan terms you wanted, or you'll need to bring more cash to the table to make the numbers work.
Desktop Appraisals and BPOs: When You Just Want to Know
Maybe you're not buying or refinancing—you just want to know what your house is worth. There are a few options here.
A Broker Price Opinion (BPO) is when a real estate agent gives you an estimated value based on their market knowledge and recent sales data. It's less formal than an appraisal and usually cheaper (sometimes free if you're considering listing with that agent). Agents use BPOs to help sellers set listing prices.
A desktop appraisal is a middle ground. The appraiser doesn't visit your property but uses tax records, photos, and comparable sales to estimate value. These became more common during the pandemic and have stuck around because they're faster and cheaper than full appraisals.
But here's the catch: neither of these carries the same weight as a full appraisal. If you need a number that a bank will actually trust, you'll need the real deal—an appraiser walking through your house with a clipboard.
What 2025 Looked Like for Home Appraisals
Last year brought some interesting shifts in the appraisal world. Markets that had been running hot started cooling down, which meant appraisers were dealing with fewer bidding wars and more realistic pricing.
In many areas, homes were sitting on the market longer, giving appraisers more sales data to work with. That's actually helpful—more comps mean more accurate valuations. We also saw continued adoption of technology in the appraisal process. Many appraisers now use specialized software that pulls comparable sales automatically and flags potential issues, making their work faster and more data-driven.
One challenge that stuck around: finding truly comparable properties. Every house is unique, and in neighborhoods with diverse housing stock, appraisers sometimes had to get creative with their comp selections. That meant more judgment calls and occasionally more disputes over valuations.
Looking Ahead to 2026: What's Coming for Appraisals
This year, expect appraisals to keep evolving. Technology will play a bigger role, with more lenders accepting desktop appraisals or hybrid models that combine property visits with digital data. Some companies are experimenting with AI-assisted valuations that can process massive amounts of market data in seconds.
But don't expect robots to replace human appraisers anytime soon. Local market knowledge still matters. An algorithm might see that two houses are the same size and age, but it takes an experienced appraiser to know that one sits on a loud corner while the other backs up to a park.
We'll probably see more variation in how appraisals are conducted based on risk. Low-risk refinances might get streamlined desktop reviews, while jumbo loans and unique properties will still get the full white-glove treatment.
According to Mike Oddo, CEO of HouseJet, "Appraisals remain one of the most critical checkpoints in any real estate transaction, and that's not changing anytime soon. In a market where prices can shift quickly and lending standards stay tight, having an independent professional verify property values protects everyone involved. Whether you're buying your first home or refinancing your tenth, understanding how appraisals work gives you the knowledge to make smarter decisions and avoid surprises at closing."
When the Appraisal Comes in Low: Now What?
Here's the scenario nobody wants: the appraisal comes back below the agreed purchase price. Maybe you offered $450,000, but the appraisal says the house is worth $430,000. What happens next?
Both buyers and sellers need to understand their options:
The buyer can make up the difference. If the appraisal is $20,000 short, the buyer could bring that extra cash to closing. The lender will only finance the appraised value, so someone's got to cover the gap.
The seller can lower the price. Many sellers will come down to meet the appraisal, especially if they're motivated or if the market supports the appraiser's number.
You can meet in the middle. Negotiation doesn't stop just because the appraisal came in. Buyers and sellers often split the difference.
The buyer can walk away. Most purchase contracts have an appraisal contingency that lets buyers back out if the property doesn't appraise at the contract price. You'd get your earnest money back.
You can challenge the appraisal. If you genuinely believe the appraiser made mistakes—used bad comps, measured incorrectly, missed important features—you can ask for a reconsideration. Bring solid evidence, and sometimes the appraiser will adjust their number.
HouseJet recommends that both buyers and sellers educate themselves about the appraisal process before entering a transaction. Understanding what drives property values in your market, knowing what comparable sales look like, and having realistic expectations about your home's worth can prevent deals from falling apart when the appraiser delivers their report. The more you know going in, the better prepared you'll be to navigate whatever number comes back.
The Bottom Line
Appraisals might seem like just another hoop to jump through, but they serve an important purpose. They protect lenders from making bad loans, protect buyers from overpaying, and provide an objective third-party opinion in what can be an emotional process.
Whether you're buying, refinancing, or just curious about your home's value, understanding how appraisers do their job puts you in a stronger position. You'll know what to expect, how to prepare your property, and what your options are if things don't go exactly as planned.
The housing market keeps changing, and appraisal practices will keep adapting right along with it. But the core mission stays the same: figuring out what a property is really worth based on solid data and professional expertise. And in 2026, that mission matters just as much as it ever has.
