Home Appraisal

What is a home appraisal?

A home appraisal determines the value of a property and is done by an impartial certified professional.  The appraiser will use similar sold properties in the area to measure your property against.  They will then adjust the value of your home based on positives or negatives in relation to the other sold properties. 

 A few things that might be positives or negatives include:

  • Are you on a busy street?
  • Does your home have a garage?
  • Updates done to your home
  • Number of bathrooms in your home

When do you need a home appraisal?

A home appraisal in necessary when trying to obtain financing for a property whether it be a mortgage or home equity loan.  Lenders need to know the value of a property before extending financing on it to make sure that you have enough equity in the home. 

How much does a home appraisal cost?

A home appraisal will generally cost between $350 and $600.  The appraisal is usually paid for by the lender and then billed to the client.  

Pro tip:  Always ask the lender to waive the appraisal cost. Sometimes it works!

What if the appraised value comes in lower than the agreed sale price?

The lender will only extend financing based on the appraisal price.  If you’re getting a conventional mortgage, the lender will be giving you 80% of the appraised value of the home.  If the sale price is higher than the appraised price, you will have to come up with more cash to close. 


You have signed a purchase contract to buy a house for $500,000. For a conventional mortgage at 80% LTV, you would need $100,000 for the down payment. 

You had the appraisal done and it came back at $475,000. The lender will give you 80% of $475,000 which is $380,000. In order to get your conventional mortgage, you will now need a down payment of $120,000.

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