- → Only a licensed appraiser can produce a true appraised value. Online estimators and agent CMAs give useful ballpark ranges, but neither is the same thing.
- → Appraised value, market value, and assessed value are three separate numbers set by three different people for three different purposes. They can move independently of each other.
- → Lenders use the loan-to-value (LTV) ratio against the appraised value, not your offer price, to set your maximum loan amount.
- → A low appraisal isn't final. You can request a reconsideration of value, renegotiate with the seller, cover the gap in cash, or walk away if your contract allows it.
- → A formal appraisal is typically required for purchases, refinances, tax appeals, estate settlements, co-owner buyouts, and PMI removal.
If you need the appraised value of a home fast: get a free estimate from an online home value tool for a ballpark figure, ask a real estate agent for a comparative market analysis (CMA) if you’re getting ready to sell, or order a licensed appraisal if you’re buying, refinancing, or dealing with a lender who requires one. Please note that only a licensed appraiser can produce an official appraised value.
That distinction matters more than most articles on this topic let on. Appraised value, market value, and the number on your property tax bill are three different things, calculated by three different people, for three different reasons. Mixing them up can cost you money, whether you’re pricing a home to sell, arguing with a tax assessor, or trying to figure out why your refinance got denied.
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What Is the Appraised Value of a Home?
The appraised value is a licensed appraiser’s professional opinion of what a home is worth, based on an in-person inspection and a comparison to similar homes that have recently sold nearby. It’s not a guarantee, and it’s not the same as what a buyer will actually pay. It’s an informed, defensible estimate that lenders rely on before they’ll approve a loan against the property.
Mortgage lenders order appraisals because they need to know the collateral is worth at least as much as they’re lending against it. If the appraised value comes in under the loan amount, the lender typically won’t approve the loan as written, and you’re entitled to a copy of that appraisal report, according to the Consumer Financial Protection Bureau.
The loan-to-value (LTV) ratio ties the two numbers together. Say a home appraises at $200,000 and the lender’s max LTV is 90%. The largest loan they’ll offer is $180,000, regardless of what the buyer agreed to pay. That single number can decide whether a purchase, a refinance, or an equity loan actually closes.
How to Find the Appraised Value of a Home
There are three real ways to get a number, and they’re not interchangeable.
| Method | Typical cost | Accuracy | Turnaround | Best for |
|---|---|---|---|---|
| Online estimator | Free | Rough range, pulled from MLS and public records, no one sets foot inside | Instant | A quick number before you do anything else |
| Agent CMA | Usually free from an agent you're working with | Better informed than an estimator, still an opinion, not a formal appraisal | 1 to 3 days | Pricing a home to list, or sanity-checking an online number |
| Licensed appraiser | Roughly $400 to $700, more for larger or unusual properties | The official value. What lenders actually use | 1 to 2 weeks | Mortgages, refinancing, tax appeals, disputes |
A) Online home value estimators. These tools blend MLS listings and public records to spit out a range in seconds. They’re a fine starting point and completely free, but they’ve never seen the inside of your kitchen. Our own free ARV calculator works the same comp-based logic if you’re weighing a renovation and want to see what it might do to the number before you spend on it.
B) A real estate agent’s CMA. An agent can pull comps, meaning recently sold homes similar to yours in size, location, and condition, and build a comparative market analysis. It’s more grounded than an algorithm because someone with local knowledge is behind it, but it’s still an opinion aimed at helping you list or buy, not a document a lender will accept in place of an appraisal. If you go this route, be upfront that you’re gathering information rather than committing to list, since agents are investing their time expecting a future client.
C) A licensed appraiser. This is the only method that produces an appraised value in the formal sense. The appraiser inspects the property, pulls recent comparable sales, and delivers a written report your lender can rely on. It’s not the same as a home inspection, which checks structural condition rather than dollar value. Cost depends mostly on your area and the size of the home.
How to estimate your home’s value yourself
Before paying for a licensed appraiser, some homeowners like to work out a rough number on their own. It’s not a substitute for a formal appraisal, and calling it “self-appraising” oversells what you’re actually doing. It’s an estimate, and it’s worth treating it that way.
1. Find comps nearby. Look for homes similar in size, bedroom and bathroom count, and lot size, ideally sold within the last two months and as close to your address as possible.
2. Work out price per square foot. Take each comp’s sale price and divide it by square footage. Do this for at least three properties so one outlier doesn’t skew the number.
3. Average it and apply it to your home. Average the per-square-foot figures across your comps, multiply by your home’s square footage, then flex the result up and down by about 10% to get a realistic range rather than a single fake-precise number.
Treat whatever you land on as a starting point for conversation, not a figure to quote to a lender.
What Affects Appraised Value
Comparable sales carry the most weight, but appraisers weigh a long list of other factors, and it helps to know which ones cut in your favor. Location and lot size are mostly out of your control. Condition, upgrades, and layout are where homeowners can actually move the number.
What Moves Your Home's Appraised Value?
Beyond comps and location, here's what appraisers actually notice
Kitchen & bathroom updates
Modern fixtures, updated counters
Updated systems
Newer HVAC, electrical, plumbing
Usable outdoor space
Decks, patios, functional yards
Extra garage or storage
Room for more vehicles or gear
Strong recent comps
Similar homes selling well nearby
Deferred maintenance
Roof, foundation, or system neglect
Dated interiors
Original fixtures from decades back
Weak comparable sales
Nearby homes selling below expectations
Functional layout issues
Awkward flow, bedrooms with no closet
Declining local market
Fewer buyers, longer days on market
If you’re weighing which upgrades are worth doing before a sale or refinance, kitchens, bathrooms, and mechanical systems tend to move the needle more than cosmetic changes. New Silver’s home appreciation calculator is a useful way to model how a given upgrade or a few years of market growth might shift your number.
Appraised Value vs. Market Value vs. Assessed Value
These three numbers get used interchangeably in casual conversation, and that’s exactly where confusion starts.
- Appraised value is a licensed appraiser’s opinion, based on an inspection and recent comps. Lenders use it to decide how much they’ll loan.
- Market value is what a buyer actually agrees to pay once the home is listed. It can run higher or lower than the appraised value depending on how competitive the market is.
- Assessed value is what your local tax authority uses to calculate property taxes. It’s typically based on a mass, formula-driven process rather than an individual inspection, and it’s often lower than either of the other two numbers.
You could think of it this way: the appraised value is the professional’s best estimate, the market value is what actually changes hands, and the assessed value is mostly a tax bureaucracy’s concern. All three can move independently of each other in the same year.
What Happens If the Appraisal Comes in Low
A low appraisal, meaning it lands below your agreed purchase price, doesn’t kill a deal automatically, but it does force a decision.
For buyers, a low appraisal usually means the lender won’t finance the full purchase price. You’ll need to cover the gap in cash, renegotiate the price with the seller, or walk away if your contract has an appraisal contingency. For sellers, it can mean going back to the negotiating table or losing the buyer altogether if neither side will bridge the difference.
If you think the appraisal is genuinely wrong, not just disappointing, you have options. You can ask your lender for what’s called a reconsideration of value, where you supply the appraiser with additional comps or details they may have overlooked, a process the National Credit Union Administration outlines for borrowers who want to dispute a low number. In some cases you can also pay out of pocket for a second appraisal, though your lender isn’t obligated to accept it.
When You Need a Formal Appraisal
- 1 You're buying a home with a mortgage
- 2 You're refinancing an existing loan
- 3 You're disputing a property tax assessment
- 4 You're settling an estate or divorce that involves real property
- 5 You're buying out a co-owner
- 6 You're trying to remove private mortgage insurance (PMI) from an existing loan
If you’re weighing whether refinancing makes sense once your equity has grown, it’s worth running the numbers through a quick loan application first so you know roughly where you stand before you pay for an appraisal.
How Appraised Value Affects Your Loan
The appraised value sets the ceiling on what a lender will offer, through the loan-to-value ratio. A $300,000 appraisal at 80% LTV caps the loan at $240,000, regardless of what you offered to pay for the home. Come in under what you need, and you’re either bringing more cash to the table or renegotiating the deal. Appraisals also help protect both sides of the transaction, since they’re one of the main checks lenders use to avoid extending more credit than a property can support.
A lower-than-expected appraisal can also push you into paying private mortgage insurance if your down payment, calculated against the new lower value, no longer clears the usual 20% threshold.
Final Thoughts
A certified appraisal is a fixed requirement for most mortgages, and it’s the number your lender actually cares about. But you don’t need to wait for a lender to order one just to get a sense of where you stand. Start with a free estimator, ask an agent for a CMA if you’re closer to listing, and save the licensed appraisal for when you actually need the official number, whether that’s a purchase, a refinance, or a tax dispute.
If you’re weighing what a renovation or an investment purchase might be worth, New Silver’s fix and flip loans and DSCR rental loans pages walk through financing options once you’ve got a number to work from. And if you’re digging into a specific property’s background before making an offer, our guide on how to find a property’s history online is a useful next stop.
FAQ
It’s a licensed appraiser’s professional opinion of what a home is worth, based on an inspection and comparable recent sales. Lenders use it to decide loan amounts.
Appraisers inspect the property, then compare it to similar homes that sold recently nearby, adjusting for size, condition, location, and upgrades.
No. Appraised value is a professional’s estimate. Market value is what a buyer actually agrees to pay, and it can be higher or lower than the appraisal depending on market conditions.
You can get a rough range using comps and price-per-square-foot math, but it won’t carry the weight of a licensed appraisal and shouldn’t be presented to a lender as one.
Deferred maintenance, dated interiors, weak comparable sales nearby, awkward layouts, and a cooling local market are the most common culprits.
You can cover the gap in cash, renegotiate with the seller, request a reconsideration of value with additional comps, or walk away if your contract allows it.
