An appraisal is an independent evaluation of the value, marketability, and condition of a property you’re purchasing. Appraisers are state-licensed, but their practices and procedures are national, set by the Appraisal Institute. They’re called the Uniform Standards of Professional Appraisal Practice (USPAP). (It’s not the best acronym.)
The appraiser considers the property’s location, size, condition, and other qualities and compares it to nearby recently sold homes to arrive at an opinion of value. 

The property you’re buying is your lender’s security – what we call the “collateral” for your loan. If you default (you won’t) (but if you did) (totally hypothetically), your lender’s path to recovering what they loaned you is to foreclose and resell the property. 

Because of this, lenders care about three things:
• Marketability – Can the property be resold easily?
• Value – What is the property worth? 
• Condition – Is it safe and habitable?

The process and the resulting report are designed to address these three concerns. 

That got dark, didn’t it? Forget I mentioned this, and go back to daydreaming about all the fun you’ll have in your new home. 

Robots! 

If your loan poses a low risk of default and Fannie Mae already has enough data on the property, their automated underwriting system may grant an appraisal waiver.

In 2012, Fannie Mae began requiring appraisers to submit reports in a standardized, digital format to a Uniform Collateral Data Portal (UCDP). The original goal was to make appraisals more accurate, consistent, and efficient to process. 

Over the years, this database has grown to include millions of appraisals, with hundreds of thousands more added monthly. This mountain of data has given Fannie Mae and Freddie Mac the opportunity to develop advanced digital valuation methods – algorithms that (sometimes) replace appraisers. 

We love waivers. They save time and money and eliminate any chance of a low appraisal or lender-required repairs. 

A waiver means your loan doesn’t require an appraisal. To be eligible for a waiver, you must put at least 10% down and represent a low risk of default. 

Waivers come from an automated underwriting system that compares your purchase price to millions of appraisal reports already on file. The system grants a waiver if it has enough information about the property and area, and an algorithm determines the price is reasonable. 

No waiver means no worries about a low appraisal. We can close more quickly, and you save the cost. We’re always happy to see a waiver!  

Robots! 

Appraisal independence is a big deal. We want an impartial, unbiased valuation of your property. Also, Federal rules (Appraisal Independence Requirements or AIR) forbid anybody with an interest in the outcome of the transaction from choosing the appraiser or influencing the process. 

We pre-screen a panel of appraisers for experience, quality of work, and local expertise. We use software to assign one of these appraisers to your purchase randomly. If your property falls outside the areas our panel covers, we’ll retain a third-party Appraisal Management Company (AMC) to assign an appraiser. 

This process assures the appraiser is competent and has the necessary local knowledge but keeps the selection of the specific appraiser at arm’s length. 

In case you’re wondering, these rules were enacted after the housing crisis. Before 2009, lenders often had cozy relationships with appraisers—some even had appraisers on staff. These relationships created a dynamic that (in hindsight) (always 20/20) could influence their work. AIR eliminated this possibility. 

Yes and no. The completed report belongs to us*. Its purpose is to give us information to ensure the property meets the requirements for your loan. However, appraisers are independent, licensed professionals. We contract with them, but they’re freelancers hired for their knowledge and expertise—to be our eyes and ears at the property. 

We select the appraiser according to Federal lending rules called Appraisal Independence Requirements (AIR). AIR’s aim is objective, unbiased appraisals. 

*I know. The report feels like it should be yours ‘cause you paid for it. Technically, it’s ours. But it might make you feel better to know we’re required to share copies of appraisals and all written reports used to assess property value.

You sure will! (It’s the law.) (Literally.)

The Equal Credit Opportunity Act (ECOA) requires lenders to provide a copy of the appraisal (and any other written valuations) “promptly upon its completion,” but no less than 3 business days before you sign closing documents. 

You’re allowed to waive that 3-day waiting period. We may discuss a waiver with you if the timing gets tight for any element of the appraisal, particularly corrections or re-inspections. But even if you waive the 3-day wait, the very latest we can share the appraisal is at closing.

A home inspection is for you, so you can learn what kind of shape your new home is in before buying it. You’ll probably use the results to negotiate repairs or credits. 

An appraisal is for your lender. Before we accept the property as collateral for your loan, we want to know its value and marketability. Appraisers don’t test systems or go into depth like a home inspector. They make surface observations and look for issues affecting value, resale, safety, or liveability. 

Appraisal fees depend on your location, the type of property, and its complexity. Most single-family appraisals cost between $500 and $900. Unique, complex, or rural properties may cost more due to the additional work or travel.

You do. (Surprised? Probably not. 🙃) Appraisers are third-party vendors we contract with on your behalf, so before we place an order, we collect a deposit for the cost.

If you negotiated for a seller credit, it can be applied toward the appraisal cost at closing.

You’ll pay a deposit before we order the appraisal. Fees vary based on the property type and area— $500 to $900 is typical. 

At the same time we collect for the appraisal, you’ll pay a $150 application fee and $25 per person for your credit report. These are part of your closing costs and reduce the amount you’ll bring to the closing table. They’ll be marked “paid outside of closing” (POC) on your Closing Disclosure.

Most appraisals come back 5 to 7 business days after we order them. However, on some properties the appraisal process requires extra time: 

• Unique properties
• Homes in areas with few recent sales 
• Rural or acreage property 
• Outbuildings like a shop or barn
• Commercial or business use 
• Tenant-occupied properties
• Accessory dwelling units (where atypical)
• Non-conforming or commercial zoning

Properties in one or more of these categories can take longer due to limited appraiser availability or added complexity. 

It depends. Generally, we need to order your appraisal at least two weeks before your closing date. 

We need the appraisal back 5 to 10 business days before closing, and the typical timeline from ordering to receipt is about a week. 

However, some loan programs take longer to process, and on some properties the appraisal process takes longer. 

Properties with unique features in rural or remote areas or occupied by tenants can extend turn times. Appraiser capacity can be an issue during times with a high volume of transactions.

We keep tabs on all these variables and will let you know when your appraisal has to be ordered to stay on track for closing. 

Maybe. It depends on your closing date. A longer closing timeline leaves room for inspections and appraisals to happen one after the other rather than concurrently. 

We need 5 to 10 business days between receipt of the appraisal and closing and most appraisals come back in about a week. 

To meet a quick closing timeline, we need to turn the appraiser loose immediately. If we don’t get a wiggle on, we won’t close on time. If we miss your closing date and the seller doesn’t agree to extend, your transaction and earnest money could be at risk. 

But a longer closing timeline buys you time to focus on inspections and hold off on the appraisal until after the dust settles on repair negotiations. 

We’ll keep you and your real estate agent posted on timing. If you’re still in the thick of repair negotiations when we need to be ordering the appraisal, we’ll let you know so that you can negotiate an extension to closing. 

An appraisal “rush” fee is an extra charge for expediting the process. To accommodate a faster-than-normal turn time, the appraiser may work early, late, or over the weekend. The rush fee compensates them for this “overtime.” 

Typical rush fees are $150 to $300, in addition to the appraisal fee. 

Rushes aren’t always possible, especially in busy markets or areas with limited appraisers, and VA loans don’t allow rush fees.

We aim to avoid rush fees. You can aid our efforts by signing your application paperwork and paying the appraisal deposit promptly. But if you negotiate a fast closing or delay ordering the appraisal, a rush fee may be necessary to close on time.

Every appraisal is marked “as-is” or “subject to.” An appraisal that is “subject to” includes an itemization of required repairs or inspections. These repairs must be completed before we can close, and the appraiser must reinspect to verify. 

Repairs may be lender-required or items you and the seller negotiated. The appraisal for a new home still under construction will always be “subject to” completion per the builder’s specifications and plans. 

Repairs should be completed a week before your closing date. But if that’s not possible, we’ll work with your real estate broker and do our best to stay on track for a timely closing. 

Two exceptions allow us to close with incomplete repairs: 

• Rehabilitation loans – Rehab loans roll the cost of repairs and improvements into your mortgage. The appraisal for a renovation loan is always “subject to” planned repairs and improvements, but construction begins after closing.

• Escrow holdback – If the seller can’t or won’t make repairs before closing you, they may be allowed to deposit funds to cover repairs into an escrow holdback. We’ll need a bid from a licensed contractor. At closing, we’ll collect the bid amount plus a cushion. After the contractor completes the repairs, they get paid from the holdback – any remaining unspent cushion goes back to whoever paid it. Escrow holdbacks aren’t always allowed and can only be used for simple repairs that can be made shortly after closing and don’t affect health, safety, or habitability.

When repairs are needed, whether before or after closing, the appraiser will re-inspect to verify completion. The fee for this re-inspection typically runs $150 to $250.

First, we’ll get you and your real estate broker a copy of the report. Your broker is the best person to talk to about the value and comps. They have expertise in property valuation and may have even been inside some of the comparable sales used in the report. (We lenders don’t get out much and rely on appraisers as our eyes and ears at the property.)

Next, review your purchase agreement. The appraisal
may be a contingency in your purchase agreement, either on its own or as a part of your financing contingency.  Your broker can help you understand your rights and the timing for renegotiating terms or (worst comes to worst) canceling your purchase.

Then, we’ll discuss how the appraisal affects your loan terms. There are three possibilities:
• There is no impact. (Surprising, right?)
• There’s an impact, but your loan is still viable and can close. 
• There’s a problem, and your loan can’t close without changes. 

Once you’ve reviewed the appraisal and your contract and understand your loan options, it’s time to decide the path forward. You could:

• Proceed to closing—Yep, just carry on. (Do not pass go. Go straight to key day!)
• Negotiate with the seller – Ask the seller to reduce the price to match the appraised value (or come closer).
• Restructure your loan – Adjust the loan terms to work with the appraised value (often, this means adding or adjusting mortgage insurance). 
• Increase your down payment – Cover the gap in value with additional cash. 
• Request a Reconsideration of Value (ROV) – Submit a formal request, asking the appraiser to consider additional or corrected information and (pretty please) adjust the value. 
• Cancel the transaction – Notify the seller that you won’t be purchasing the home. 

Which paths are open to you depends on the terms of your purchase agreement, the specifics of your loan, and your financial resources. The best strategy may be to combine a couple of these options. 

How you feel about things matters, too. If the property is your dream home with unique features you may not find in another house, the low appraisal may not dampen your enthusiasm to close. (It may even have been expected.)

If all of this feels a little overwhelming, remember two things:
1. Appraisals seldom come in low (in our experience, less than 5% of the time). 
2. You’re not in this alone! You have us and your real estate broker at your side. 

A low appraisal can happen for several reasons:
• Market Conditions: Appraisers can only look backward at closed sales. Rapidly increasing home prices may outpace recent comparable sales (“comps”) used in the appraisal.
• Limited Sales Data: If few comparable homes have recently sold, the appraiser may get stuck teasing information from limited data or extrapolating from less similar homes. 
• Unique Properties: Appraisers determine the value of an attribute by comparing comps with and without that same quality, making homes with rare features challenging to value accurately.
• Property Condition: Appraisers consider condition when choosing comps. Similar comps that are more updated or in better repair receive adjustments that lower their value in the reconciliation. 
• Competition: A bidding war for a special property may introduce personal or emotional factors that could result in a price above the value an appraiser can support following their required methodology.
• External Factors: Externalities like a busy road, nearby airport or train track, nearby foreclosures, zoning, or neighborhood trends can bring adjustments to comps that can impact value.

A low appraisal is rarely a complete surprise. Appraisers get their information from the Realtor’s listing service. Your broker can review the available comps and anticipate the potential for a low appraisal. You can use this information to adjust your offer to align with the comps, and/or we can help you do some “what-if” planning and map out loan strategies ahead of time. 

No. Appraisal rules strictly forbid “value shopping.” But you can ask for a Reconsideration of Value (ROV). This process allows you to point out errors, submit additional data, and overlook comparable sales.

If the ROV process reveals the appraisal is flawed, our underwriter (and only our underwriter) may authorize a second appraisal. 

Rarely! In our experience, less than 5% of the time. 

From May 2017 to August 2024, our team helped clients purchase 2,192 homes. Just 4.79% of appraisals came in below the purchase price. However, that data includes the extreme sellers’ markets of 2021 and 2022. Exclude those two years, and just 3.38% of appraisals were at a value less than the contract price.

The low prevalence of low appraisals is attributable, in my observation, to two things:
• The market works. You and the seller are free agents competing with others trying to buy or sell a home. When you make an offer for a home, it’s because you are willing to pay the amount you’re offering, informed by all other homes for sale. When the seller says “yes” to your offer, they believe your offer represents the best price they can get. 
• Appraisal methodology. If your purchase is “arm’s length,” the appraiser starts by assuming that your purchase reflects the market in action and is, therefore, the best indication of the property’s value. With this premise in mind, they check to see if other nearby, recent sales of similar homes support the value. 

A low appraisal means a higher loan-to-value (LTV) ratio. (How’s that for some lending jargon?)

Let’s unpack LTV and talk about how it affects your loan. 

LTV is calculated exactly the way you might intuit: 
Loan amount ÷ property value = loan-to-value ratio

We sometimes say that LTV is the “inverse” of your down payment – 20% down is the same as 80% LTV. That’s handy shorthand, but it only works when the appraisal is at least equal to the price. 

If the appraisal is less than the price, the only way to understand your options is to think like a lender. That means thinking in terms of LTV. 

And “value” in the LTV equation is always the lesser of your purchase price or the appraised value.

Let’s say you’re putting $100,000 down on a $500,000 purchase, but the appraisal comes in at $480,000. Your down payment is 20% ($500,000 x 20% = $100,000), but your LTV looks like this:
$400,000 loan amount ÷ $480,000 value = 83.33% LTV

You’re still putting 20% down, but your LTV is 83.33%. A little mind-bendy, right?** 

Lending math is always based on LTV as a percentage. So, the real question is: How does a higher LTV affect your loan?*

*Answer: It depends. In this example, shifting from 80% to 83% LTV means adding mortgage insurance, which would likely be about $33 a month (until you qualify to cancel it). 

**Pro tip: Focus on your down payment in dollars rather than as a percentage to avoid cognitive dissonance: $500,000 price – $100,000 down = $400,000 loan. 

A higher LTV just means you’re asking to borrow a higher percentage of what your lender sees as the property’s value. 

There are five ways this may affect your loan: 
1. Nothing – Sometimes, a low appraisal has no impact on your loan. You can carry on with your purchase at the same rate, payment, down payment, and loan amount – nothing changes. 
2. Higher closing costs – A higher LTV may trigger adjustments to loan-level pricing adjustments (LLPAs), which are fees built into your loan costs – either increasing or decreasing closing costs. 
3. Mortgage insurance (MI) – A low appraisal could push your LTV over 80%, which may trigger mortgage insurance.
4. Loan restructuring – We may explore options like splitting your loan into two parts or switching to a program that allows a higher LTV.
5. More cash – Sometimes, the only option is to reduce your LTV by bringing more cash to closing. Or you may elect to bring in more cash to avoid another outcome (like paying MI).  

Note that only the last option requires more money. The other four could allow you to proceed to closing with no additional cash due out of pocket despite a low appraisal. 

Not necessarily! A low appraisal doesn’t automatically mean you’ll need to bring more money to closing.

Your options depend on the specifics of your loan. We need to discuss (in lender-speak) how a higher loan-to-value (LTV) ratio affects your loan. 

You may have options to forge ahead at a higher LTV. If not (or if you don’t like the higher-LTV options), we’ll look for ways to reduce your LTV. 

LTV is loan amount divided by property value. “Value” is always the lesser of your purchase price or the appraised value. We can reduce your LTV on either side of the equation – or both: 
You could negotiate with the seller to lower the price.
You could increase your down payment to reduce the loan amount.
You could combine a little of both. 

We’ll discuss all options and explain the pros, cons, and consequences so you can choose a path that best fits your goals and resources. 

It depends. Possibly, $0. But if extra cash is due, there’s a simple formula for calculating the amount. 

A low appraisal doesn’t automatically mean you must bring in more cash. However, if a low appraisal negatively impacts your loan, here’s how to figure out the extra money you’ll need to avoid the negative consequence: 

Purchase price – appraised value = “appraisal gap”. 

Appraisal gap x desired loan-to-value ratio (LTV) = additional cash needed

Suppose you’re paying $500,000 and putting 20% down ($100,000) to avoid mortgage insurance (MI), but your appraisal comes in at $480,000. If you don’t want to pay MI, you must maintain 80% LTV. 

Here’s the math: 
$500,000 price – $480,000 appraised value = $20,000 appraisal gap

$20,000 appraisal gap x 80% LTV = $16,000 additional cash needed

But bringing extra cash is just one solution—there are often other options that might better fit your goals and circumstances. We’ll walk through all of the options and make sure you have the information you need to make the best choice.  

If you think the appraiser missed the mark, you can request a Reconsideration of Value (ROV). We’ll guide you through the process.

Complete the ROV form
We’ll provide a form you and your real estate agent will complete together. On it, you’ll point out any errors, provide additional comparable sales, and explain why these comps are better than those the appraiser chose. 

ROV review
We submit the completed ROV form and supporting information to our appraisal desk. They give it a once-over to ensure it holds water and then send it to the appraiser. Appraisers typically respond within a couple of days. 

Appraiser’s response
We’re hoping for an updated appraisal with a higher value that incorporates the new data. But some ROV responses read as a rebuttal – explaining why their comps are better than yours (“damn right, they’re better than yours”). 

Final appeal
If the appraiser rejects the ROV, your last stand is an appeal to our Appraisal Quality Assessment team. If you can make a case that the appraisal is flawed, they may agree to toss it out and allow us to order a new appraisal.

But… remember… appraisals rarely come back low (less than 5% of the time, in our experience). 

And… if the appraisal comes back low… we can often close using the lower value. 

So… It’s unlikely that you’ll need to go through the ROV process. In an average year, we help our clients buy hundreds of homes, and only one or two go through the ROV. 

Furthermore… a failed ROV may be one stop on the road to negotiating a lower price. Sellers want to know we made every effort to support a higher value before they’ll agree to reduce it.

Initially, a low appraisal feels like bad news. I mean, who likes to hear someone thinks the value of the home you’re all excited to buy is lower than the amount you’ve agreed to pay? It’s like hearing your baby’s ugly. 

But, there could be a silver lining. 

The appraisal is often a contingency in your purchase contract—either on its own or as part of a financing contingency.* If so, a low appraisal may give you grounds to re-open negotiations and haggle for a lower price.

If you were happy when the seller accepted your offer, imagine how you’ll feel if they agree to sell at an even lower price. Huzzah!

*Talk with your real estate broker about the terms of your purchase agreement, the contingencies that protect you (and your earnest money), and the timeline for each contingency. 

A higher appraisal means you’re getting a great deal. 🥳 You’ll walk into your new home with instant extra equity on closing day.

However, a higher appraisal doesn’t affect your loan terms. You can’t borrow extra money and mortgage insurance remains the same. Loan terms are always based on the lower of the purchase price or the appraised value. 

Still, it’s fantastic news, and it points to good things in the future: 
• You may be able to cancel mortgage insurance sooner.
• You could qualify for better terms when refinancing.
• You’ll likely see a bigger profit when you sell someday. 

So, celebrate the great news – and say “thank you” to your real estate broker for a job well done!

Appraisers can take three approaches to determining the value of a property: 

• Sales comparison approach – Comparing a property to recently sold, nearby, similar homes.
• Cost approach – Estimating what it would cost to rebuild a home.
• Income approach – Extrapolating value from income earning potential.

The Sales Comparison Approach is the gold standard for residential mortgages. What lenders really want to know is how much a property will resell for if (worst comes to worst) they wind up owning it through foreclosure. 

Because the Sales Comparison Approach is heavily emphasized, appraisers may not bother developing the Cost or Income approaches. However, if your appraisal includes the Cost Approach, share it with your insurance agent. It may help them determine the appropriate coverage for your new home. 

The Income Approach is prioritized in commercial lending—for apartment buildings with 5 or more units, office buildings, warehouses, and other commercial properties. 

Appraisers use the Sales Comparison Approach to determine the value of a property. They select recently sold, nearby properties with similar characteristics to the home you’re purchasing – called “comparables” or “comps,” for short. 

But unless you’re buying a home in a subdivision of similar homes or a condominium, the comps are unlikely to be an exact match. To account for differences, appraisers make adjustments.

The comps and all adjustments are in the Sales Comparison Approach section of your appraisal (aka “the grid”). If you check ‘em out, you may notice they seem… low.

I, too, have scratched my head trying to make sense of adjustments to comps. I’ll do my best to pass along the wisdom handed down to me by kindly, wise appraisers over the years: 

Market value vs. cost
Appraisers focus on market value, not replacement or construction cost – what are buyers willing to pay for attribute X? Significant modifications (like adding a bathroom or bedroom) tend to cost more to build than they add to the value. This may even be why you’re moving to a new home rather than remodeling one you already own.

Price per square foot
Zillow and real estate brokers use “price per square foot” as a comparative tool – dividing the price (including the land, home, and all improvements) by the home’s square footage. Appraisers layer their adjustments for square footage over an underlying value for the land, location, quality of construction, neighborhood, etc.

Composite view
Appraisers don’t assign standalone values to individual features. Instead, they evaluate the property as a mashup of location, overall square footage, quality of construction, and specific amenities. Grid adjustments are a tool to fine-tune value. 

And that’s the best I can do! For more on this subject, you’ll have to buy an appraiser a beer. 

Appraisers use a “dot system” when they tally bathrooms. The number in front of the dot is for full bathrooms (bathrooms with a tub and shower). The number after the dot is for half bathrooms (bathrooms with a toilet and sink but no tub and shower). 

So, a home with two full and one half bath would show as 2.1 on an appraisal, not 2.5. (A house with 2.5 bathrooms would have two full and five half baths… interesting floor plan.) 

The appraiser must have had a three-martini lunch. 🍸 Kidding…I’m kidding! 

The real reason is that below-grade square footage isn’t included in a home’s Gross Living Area (GLA). If any wall of a level touches soil, that level is considered “below grade.” This can make for a perplexing appraisal. 

Take a daylight ranch with 3 bedrooms and 2 bathrooms. If a bedroom and a bathroom are in the basement, that’s a 2-bedroom, 1-bathroom home on an appraisal. The bedroom, bathroom, and square footage in the basement are  counted under “basement & finished rooms below grade.”

The value of below-grade square footage is in the mix. You’ll see adjustments for comps with bigger, smaller, unfinished, or no basement. 

Room counts, and square footage for a daylight ranch or split-level always look wonky. And don’t even get me started on homes built into a hillside. A house on a hill might have zero GLA but a stunning panoramic view from 100% “below grade” square footage. 

The “Gross Living Area” (GLA) includes all above-grade finished space. This standardization ensures all appraisers evaluate square footage consistently across all homes…but it also makes some appraisals look “wrong” to the untrained eye. 

If any part of any wall of a level of a home touches soil, that level is “below grade” and not counted in the GLA.

If you’re buying a 3000-square-foot daylight ranch with 3 bedrooms and 2 bathrooms—with one of each in the basement—your appraisal will show 1500 square feet, 2 bedrooms, and 1 bathroom. 

But don’t worry; the additional living space counts toward value. It’s on the for “basement & finished rooms below grade”. The appraiser looks for comparables with similar finished basements. Where a comp differs, they’ll adjust. 

Yes, FHA appraisals require the appraiser to verify that the home meets HUD’s minimum health, safety, structural soundness, and livability standards.

Health and Safety: Systems like heating, plumbing, and electrical must work. No trip hazards may be present. There can’t be peeling paint on homes built before 1978 (due to lead risks), and water heaters need double-strapping. Stairs require handrails.

Structural Soundness: The roof should have several years of life left, the foundation must be stable, and decks, stairs, and railings must be sound.

Access and Environment: The home must have safe access and be free from environmental hazards. Private wells and septic systems must pass tests, and a well can’t be too close to a septic drain field. Connecting to public water service and waste disposal is usually required when available.  

This might seem like a lot, but most reasonably well-maintained homes meet HUD standards. Issues flagged on an FHA appraisal—like a leaky roof or unsafe deck—would also be an issue for any other loan.

If you’re buying with an FHA loan, we’ll keep an eye out for potential issues. Peeling paint, water heater strapping, and missing handrails are the most common FHA “extras” – these are usually easy and inexpensive to fix.

But if your heart is set on a home that doesn’t meet HUD standards and the seller won’t make repairs, FHA offers a renovation loan that may allow you to finance the required fixes.

So glad you asked! The VA appraisal process marches to the beat of its own drum (drum corps?). Here are some of the key differences: 

VA Appraiser Assignment
The VA keeps its own panel of appraisers. We order the appraisal through their lender portal, and the VA assigns the appraiser.

Property Inspection
When a VA appraiser visits the property to gather the usual information, they also check its condition against the VA’s Minimum Property Requirements (MPRs). MPRs focus on health, safety, and structural standards. 

Timeline
The VA gives appraisers a specific number of business days to complete a report. This varies by region but 10 to 15 days is common – that’s two or three times longer than most non-VA appraisals. Some appraisers finish sooner, but we never know – and “rush” requests aren’t allowed – so it’s best to plan for the worst-case timeline. 

The Notice of Value (NOV)
Before we share a copy of the appraisal, it has to go to the underwriter. The underwriter issues a Notice of Value (NOV), which is the official value determination and includes a list of any required repairs (MPRs). 

Repairs and Reinspection
If repairs are required, they must be completed and reinspected by the appraiser before closing. 

The “Tidewater”
If the appraiser suspects the value may be lower than the purchase price, they’ll notify us through the “Tidewater.” We’ll inform you and your real estate agent. The Tidewater protocol is a 48-hour “pause,” allowing you to provide additional information or comparable sales to support the property’s value. 

Reconsideration of Value
If the value on the NOV is below your purchase price, you can request a Reconsideration of Value (ROV). We’ll provide a form you and your real estate broker can complete together, pointing out errors and providing additional information and comparable sales to support the value. We’ll submit this information to the VA on your behalf and await their response. 

Escape Clause
VA loans require an amendment to your purchase agreement, allowing you to cancel the contract and receive your earnest money back if the NOV is lower than your purchase price. If the appraisal is low, you can cancel or move forward – as-is or with a renegotiated price. The choice is yours. 

Yes! Different property types have unique characteristics, so appraisers follow specific guidelines and use specialized forms to capture the information we need to verify the property meets the criteria for your loan. 

Condominiums
Appraisers use a specific form to gather details about the homeowners association (HOA) and community amenities, in addition to information about the unit you’re purchasing

Manufactured Homes
Manufactured homes are appraised on a specialized form that includes the manufacturer’s details, year built, number of sections, and any modifications. The appraiser must locate the HUD data plate and certification labels (tags) to confirm the home complies with federal standards. FHA loans also require an engineer’s certification that the foundation meets HUD standards.

Investment property
If you’re buying a single-family rental property or a home with an accessory dwelling unit (ADU), the appraiser completes a rent schedule. They’ll search for comparable rental properties (“rent comps”), adjust for differences, and estimate the market rent.

For 2-4 unit properties, appraisers use a small income property appraisal form, which includes rent comparables, to assess each unit’s rental income potential.