Home appraisal cost and how it works

What an appraisal is

An appraisal is a written opinion of what a property is worth, meant to be an independent assessment, and your lender may require one (CFPB). It is not a home inspection. HUD’s notice says an appraisal “does not replace a home inspection,” and FHA does not guarantee the value or condition of the home. See what a home inspection costs.

Your right to a copy

Regulation B applies when you apply for credit secured by a first lien on a one-to-four-unit dwelling (12 CFR § 1002.14).

1. Notice. The lender must tell you in writing, no later than the third business day after you apply, that you have the right to a copy of all written appraisals.
2. Copy. The lender must give you each appraisal promptly upon completion or three business days before closing, whichever is earlier.
3. Waiver. You may agree to receive it later, up to closing. The waiver must be obtained at least three business days before closing, unless the new copy has only clerical changes from a version you already had.
4. Price. The lender may not charge you for the copy. It may require a reasonable fee to reimburse the cost of the appraisal itself.
5. If the loan does not close. The right applies even if your application is denied, incomplete or withdrawn.

An electronic copy is allowed if you consent under the E-Sign Act.

Independence rules

Regulation Z (12 CFR § 1026.42) protects the appraiser’s independent judgment. No lender or settlement service provider may try to base the value on anything other than that judgment through coercion, bribery, intimidation or collusion. Examples of banned conduct include asking an appraiser to report a minimum or maximum value and threatening to withhold payment because the value is too low. A lender may still ask for more information about comparable properties, ask for an explanation of a conclusion, or ask the appraiser to correct errors.

The rules also bar an appraiser from having a direct or indirect interest in the property or the transaction. A lender’s employee or affiliate can still appraise if firewall conditions are met. FHA adds that the lender, not a mortgage broker, must select, retain and pay the appraiser (Handbook 4000.1).

FHA validity: a worked example

The FHA appraisal is valid for 180 days from its effective date (HUD Mortgagee Letter 2022-11). The Handbook counts day one as the day after the effective date. Suppose the appraiser inspected the home on November 2, 2026. Day 180 is May 1, 2027. If the loan will disburse later, the lender can order an update, which stays valid for one year from the original effective date, to November 2, 2027. A lender must order a new appraisal for each FHA case number and cannot reuse one from another case number, even if it is under 180 days old.

If the appraisal comes in low

The CFPB says it is very risky to buy a home for more than the appraised value. Get your copy, ask the seller to lower the price, and talk to an attorney before cancelling, since your contract may impose cancellation costs. In FHA loans, the underwriter may request a reconsideration of value when the appraiser missed relevant information. If the data was not available on the effective date, the appraiser may charge more, but the borrower is not held responsible when the missing data was not the borrower’s fault (Handbook 4000.1).

Where states differ

States license and certify appraisers, and their paths differ; the federal Appraisal Subcommittee oversees state programs and keeps a national registry. For how licenses are checked, see Texas license verification and California license verification. Your appraisal also sits alongside the title and escrow costs and the FHA loan rules.