Understanding what happens behind the scenes can ease your mind and help you prepare. Here’s a step-by-step look at how an appraisal unfolds—from the moment your lender clicks “order” to the delivery of the final report, plus the key players and the top three factors that shape your home’s value.
Your lender or mortgage broker initiates the appraisal by submitting an electronic order through an appraisal management system (AMS). This order includes basic property details, the loan amount, and the due date for the appraisal report.
The appraisal management system assigns your file to a certified appraiser who is both qualified in your market area and free of conflicts of interest. Once accepted, the appraiser reviews the order instructions, confirms the timeline, and reaches out to schedule the inspection.
Before the on-site visit, the appraiser researches public records, prior sales history, zoning information, and any building permits. They also pull preliminary “comps” (comparable sales) to understand recent prices of similar homes in your neighborhood.
During the inspection, the appraiser measures the home’s dimensions, counts rooms, and notes construction materials and upgrades. They assess the overall condition, looking for signs of deferred maintenance, the quality of finishes, and any unique features, such as energy-efficient systems or custom millwork. Curb appeal and neighborhood characteristics are also documented.
Back at the office, the appraiser refines the comparable-sale analysis, adjusting for differences in square footage, lot size, condition, and amenities. They may run cost and income approaches if the property type warrants it (for example, a small investment rental). The appraiser then reconciles these approaches to arrive at a final opinion of market value.
The appraiser fills out a standardized appraisal report form, the Residential Appraisal Report (Form 1004), for most single-family homes, or a more detailed narrative for complex properties. This report includes:
A description of the property and neighborhood
Photos of the home’s exterior, interior, and comparable sales
A map showing comp locations
The adjustments made to each comparable sale
The final value conclusion
A second, senior appraiser or an appraisal reviewer checks the report for compliance with Uniform Standards of Professional Appraisal Practice (USPAP) and lender guidelines. Once cleared, the final PDF, XML is delivered to the lender, who then shares it with you.