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Can you choose your own appraiser?
While the lender is responsible for arranging the appraisal, the buyer can insist on a highly qualified appraiser. In fact, that’s advice straight from Daniel Crehin, owner of Crossland Appraisal Service, which provides commercial and residential appraisal services on the West Coast.
“Get a good, reputable appraiser,” he says. His recommendation is that once your lender has scheduled your appraisal, make sure your appraiser is a member of the Appraisal Institute.
Another way to inspect an appraiser’s credentials is to see if they have any professional designations. Crehin, for example, has an MAI (Member Appraisal Institute) designation, while Meinczinger’s credentials include the SRA (Senior Residential Appraiser) and AI-RSS (Appraisal Institute, Residential Review Specialist) designations. These indicate additional education and experience.
You can examine your appraiser’s credentials by visiting the National Registry of Appraisers and by looking at the Appraisal Institute’s database.
Understanding your appraisal
You’ve just received a copy of the appraisal from your lender. One step closer to closing day and moving into your new home! Let’s talk about the different scenarios that accompany your appraisal outcome.
Did the appraisal come in higher than the offer the seller accepted? That’s good news for the buyer, says Spray.
“It means congratulations to the buyer because you bought a house that has built-in equity in it, according to the appraiser,” he says.
How does an appraisal affect your mortgage approval and loan terms?
The appraisal plays a crucial role in your loan amount and terms. Lenders use the home’s appraised value to determine how much they’re willing to lend. If the appraisal comes in higher than the purchase price, it’s great news — you instantly gain equity! However, if it comes in lower, it can create financing issues.
Here’s what might happen with a low appraisal:
- You’ll need to pay the difference between the appraised value and the purchase price.
- You can renegotiate with the seller for a lower price.
- Your loan terms might change, requiring a higher down payment.
What can you do if the appraisal comes in too low?
What if the appraisal comes in lower than the amount you told the seller — and your lender — that you would pay?
According to the January 2025 Realtors® Confidence Index Survey from the National Association of Realtors, 5% of contracts were delayed due to appraisal issues. Though contract terminations due to appraisal concerns don’t happen as often, you’re certainly not alone if this happens to you, and this can be a stressful situation for any buyer.
If your appraisal is lower than expected, don’t panic! There are a few different paths forward:
- Request a Reconsideration: Provide additional comparable sales (comps) that might justify a higher value.
- Negotiate with the Seller: Ask them to lower the price to match the appraised value. You can also agree to split the difference with the seller. For example, if the appraisal is $10,000 off from the offer price, the seller can accept an offer that’s $5,000 lower while you add $5,000 to your down payment.
- Make Up the Difference: If the lender won’t adjust the loan, you can pay the gap in cash.
- Get a Second Opinion: You can also push back. Let’s say you think the appraiser got it wrong. You (or the seller, for that matter) can dispute the appraisal — though that may mean it’s you who pays for a second appraisal. You can also find another lender and get a new appraisal, which you’ll need to pay for. A new appraisal might yield a different result, though it comes with additional costs.
If your contract included an appraisal contingency, you may choose to walk away and try your luck with a different house.
If a sale doesn’t go through, who pays the appraisal fee?
The appraisal fee is typically non-refundable, even if the deal falls apart. Since the appraiser provides a service — assessing the home’s value — the cost is paid upfront by the buyer or at the time of service. However, if the cancellation happens before the appraisal is completed, you may be able to negotiate a partial refund.
Some ways to protect yourself include:
- Appraisal Contingencies: If an appraisal comes in lower than expected, a contingency allows you to back out or renegotiate.
- Seller Concessions: In rare cases, sellers may agree to cover the appraisal fee as part of closing negotiations.
- Lender Credits: Some lenders offer credits to offset appraisal costs in certain situations.
Can I get an appraisal waiver?
Yes, in some cases, lenders may waive the appraisal requirement altogether. Appraisal waivers are typically available for:
- Low-risk borrowers with a strong credit profile.
- Homes that have been recently appraised through Fannie Mae or Freddie Mac databases.
- Refinancing situations where the lender has a solid valuation history of the property.
To check if you qualify for an appraisal waiver, ask your lender. If eligible, you can save time and money by skipping the traditional appraisal process.
Factor the appraisal into your home ownership journey
When you’re buying a home, costs can quickly add up. There’s the down payment, of course, and the home inspection. Maybe you’ve also opted to conduct a survey? And we haven’t even talked about moving costs or the startup charges that can accompany getting your utilities up and running.
The home appraisal is one more expense you’ll need to prepare for to achieve your goal of homeownership. Ultimately, the appraisal is a worthwhile investment; you want to make sure you’re getting your money’s worth and paying the fair market value of the property.
An experienced real estate agent can walk you through the process. Get in touch today and connect with a top HomeLight agent.
Header Image Source: (DC Studio / Shutterstock)
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