When you’re buying a home, one thing that can surprise first-time buyers is this: you’re not the only one who needs to get approved — the home has to qualify too.

That’s where an appraisal comes in. It’s step eight in our Home Buying 101 series, and it plays a crucial role in whether your financing will go through.

What Is a Home Appraisal?

A home appraisal is a professional opinion of a property’s market value, provided by a licensed appraiser. It’s not done by your lender, your real estate agent, or the seller. Instead, the appraiser is an independent third party who gives a fair, unbiased estimate of the home’s value.

This step ensures that the lender isn’t loaning more money than the home is worth. Think of it as a safety net for the bank — and for you.

Want to dig deeper into how appraisals work? Check out Consumer Financial Protection Bureau’s guide to home appraisals.

What Appraisers Look At

Appraisers compare the home you’re buying to similar homes — often called “comps” — that sold recently in the same area. They typically evaluate:

• Size and square footage

• Location and neighborhood

• Condition and quality of construction

• Updates or renovations

• Lot size and features like garages or pools

• Comparable sales from the past 6 months

They’re also on the lookout for anything that could affect livability or safety — for example, missing smoke detectors, broken windows, or outdated electrical systems.

For a technical breakdown, you can review Fannie Mae’s appraisal guidelines.

What If the Home Doesn’t “Pass”?

An appraisal doesn’t result in a pass/fail grade, but it can absolutely impact your financing.

If the appraised value comes in lower than the sale price, lenders use the lower number to determine how much they’re willing to lend. That means:

• You may need a larger down payment to cover the gap.

• The seller might lower the price to match the appraisal.

• The deal could stall unless a compromise is reached.

If the home has safety issues or necessary repairs, the lender may require that those items be fixed before the loan is finalized — especially with FHA or VA loans that have stricter property standards. Learn more from HUD’s official site on appraisals.

Why the Appraisal Matters So Much

It’s easy to get emotionally attached to a home, but the lender is thinking purely in terms of risk. If you default, they need to know they can recover their money. So even if you and the seller agree on a price, the appraisal ultimately determines how your loan will be structured.

This step protects you too — it helps ensure you’re not overpaying for a property.

Bottom Line

The appraisal might seem like just another box to check off, but it can make or break your deal. It ensures the home you’re buying is worth the investment — for both you and your lender.

If you’re in the market and want to know how to prepare for the appraisal stage or avoid common pitfalls, let’s talk. I can help you navigate each step and make sure your financing stays on track.