When you’re buying or selling a home, one word can make or break the deal: appraisal. It’s the invisible gatekeeper in real estate transactions, and it can affect not only how fast you close but also how much money changes hands. Yet, many people don’t fully understand how appraisals work, how long they take, or what their real financial consequences are.
Let’s break it down.
What Is a Real Estate Appraisal?
A real estate appraisal is a professional estimate of a property’s value, typically ordered by a lender before they approve a mortgage. It’s used to ensure the home’s price matches its market value, so the lender isn’t taking on more risk than necessary.
It’s also a key step in pricing negotiations and can determine whether a deal goes through or falls apart.
How Long Do Appraisals Take?
According to the U.S. Government Accountability Office, the average time to complete an appraisal ranges from 5 to 20 days, depending on the state. Factors like demand, local regulations, and appraiser availability all influence timing.
Want a more specific breakdown? Here’s a quick guide:
- Urban areas: Typically 5–10 business days
- Rural locations: Can stretch to 15–20 days due to limited appraiser availability
- High-demand seasons: Expect delays during the spring/summer housing rush
Still wondering how long appraisals take? It’s best to ask your lender early in the process so there are no surprises.
What Happens During the Appraisal Process?
Here’s what typically happens:
- Order placed by lender once under contract
- The appraiser visits the property and examines size, layout, condition, updates, and location
- Compares the home to recently sold, nearby homes with similar features
- Issues a report with the final value, often within a week or two
Pro tip: Sellers can speed things up by providing a list of upgrades and ensuring the property is clean and accessible.
How Appraisals Impact Timelines
Delays in appraisal = delays in closing.
If the appraiser is backlogged, it could push the timeline by a week or more. In competitive markets, this could mean losing the buyer or the next house you’re eyeing.
And if the appraisal comes in low? Expect re-negotiations, or worse, contract cancellations. That’s why cash buyers, who often waive appraisals, can close in as little as 7–14 days.
Financial Implications for Buyers and Sellers
For Buyers:
- If the home appraises below the offer price, you may need to pay the difference out of pocket.
- A low appraisal can be a useful tool for negotiating home pricing, but only if the seller is willing.
- You might end up walking away and losing earnest money if financing falls through.
For Sellers:
- Low appraisals may force you to drop the price or lose the sale.
- A high appraisal gives you leverage in multiple-offer scenarios.
- Accurate pricing from the start helps reduce surprises and delays.
Market Trends That Affect Appraisals
Recent data from the Federal Housing Finance Agency shows that in Q3 2024, the median appraised value for single-family homes rose 5.2% year-over-year. Properties with Accessory Dwelling Units (ADUs) saw a 7.8% increase, demonstrating how home features influence value.
Meanwhile, the Appraisal Institute reports that energy-efficient features can bump value up by 2% to 5%, while environmental risks could reduce value by up to 15%.
And let’s not ignore bias. The National Fair Housing Alliance found that homes in Black and Latino neighborhoods are often appraised 10% to 23% lower than comparable homes in White neighborhoods. Transparency and standardized processes are urgently needed to close these gaps.
Industry Outlook
According to IBISWorld, the U.S. real estate appraisal industry pulled in $9.8 billion in 2024. About 60% of that comes from residential work alone, with steady growth projected over the next five years.
Why does this matter? It means appraisals aren’t going anywhere. They’re an essential part of a healthy real estate ecosystem.
Final Thoughts
Appraisals might seem like a box to check, but they’re so much more. They impact not just when you close, but how much you walk away with. Timelines, negotiations, and even equity are all influenced by this one step.
So whether you’re buying or selling, understanding the appraisal process is a must. Be proactive. Stay informed. And never underestimate the power of an accurate appraisal.
Because in real estate, every dollar—and every day—counts.
