What Is a Real Estate Appraiser?

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Definition

A real estate appraiser is a professional whose role is to provide a professional, objective, and accurate representation of a property’s value.

Key Takeaways

  • A real estate appraiser provides a fair and objective judgment of a property’s worth.
  • Real estate appraisers have specific educational and licensing requirements, and each state maintains its own standards.
  • You don’t have to locate your own appraiser. Your bank will contract with one on your behalf.
  • You’ll need to pay the price of the appraisal as part of your closing costs. Average appraisals range from $300 to $400.

Definition and Example of Real Estate Appraisers

A real estate appraiser is a professional judge of property value. They take into account different factors—including your property’s condition, lot size, upgrades, amenities, and location—to determine its valuation. They also consider the climate of the market. Once they’ve completed their assessment, they’ll issue an appraisal of the property they’ve evaluated.

Note

An appraiser will need inside and outside access to a property to properly evaluate it.

An individual seeking to become a real estate appraiser must meet strict requirements, including a bachelor’s degree and state licensing. The licensing required will vary by state, but potential appraisers must meet minimum standards set by the federal government.

Real estate appraisers are called for in a variety of situations, including when a property is sold, mortgaged, developed, insured, or taxed.

Other situations in which a real estate appraiser may be required include:

  • Tax assessments and appeals of those assessments
  • Negotiating a lease
  • Purchase-price negotiation between buyers and sellers
  • A government agency acquiring private property for public use

How Real Estate Appraisers Work

The most common situation in which you’ll encounter a real estate appraiser is when you want to buy a home. Much risk is involved when lenders choose to lend you money, especially when the loan runs into hundreds of thousands of dollars. To help mitigate this risk, lenders will employ a real estate appraiser to create an appraisal of your home.

The process is helpful for both parties. Home appraisals help lenders ensure that the value of the property matches your purchase price. You, meanwhile, can get an accurate picture of the home you’re trying to buy, including lot size, square footage, and more.

Note

Banks often will order an appraisal when you refinance your home as well as when financing is needed for a new mortgage.

Fortunately, finding a real estate appraiser isn’t something you’ll have to deal with. Banks contract their own home appraisers to complete an appraisal.

However, just because you won’t be locating the real estate appraiser yourself doesn’t mean the home appraisal will be free—you’ll need to pay for it. The average cost for an appraisal is around $300 to $400. You’ll find the exact amount for it on your Closing Disclosure form as part of the loan’s closing costs.

If all goes well with the real estate appraisal, the bank will move forward with your loan. However, if the appraisal value doesn’t match the purchase price of the property, you may have to front more money to cover the gap between the two numbers. You might also have to renegotiate the home’s price. If neither happens, the sale could fall through.

Do I Need a Real Estate Appraiser?

Real estate appraisers are usually required when it comes time to purchase a home. 

There are some instances in which a lender may opt to waive in-person appraising, such as when a home already has been recently appraised. However, employing real estate appraisers is more common than not. Certain refinancing options may also allow you to skip in-person appraisers, such as using the Veterans Affairs (VA) interest rate reduction refinance loan.

For other situations, you still may want to hire a real estate appraiser for yourself. This may be useful when you’re considering putting your property on the market but don’t have any idea about market conditions. A realtor can usually give you a fair judgment, but an appraiser’s valuation is far more detailed.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Appraisal Institute. “The Appraisal Profession.” Accessed Dec. 16, 2021.

  2. HomeAdvisor. “How Much Does a Home Appraisal Cost?” Accessed Dec. 16, 2021.

  3. Consumer Financial Protection Bureau. "Closing Disclosure Form,” Page 2, See B1. Accessed Dec. 16, 2021. 

  4. Quicken Loans. “What To Do When You Receive a Low Appraisal.” Accessed Dec. 16, 2021.

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