Process
Appraisal
An independent professional estimate of a home's market value, ordered by the lender to confirm the property is worth enough to secure the loan.
What does appraisal mean?
An appraisal protects the lender by confirming the home is worth at least what you're borrowing against it. A licensed appraiser compares the property to recent nearby sales and inspects its condition. If the appraisal comes in below the purchase price, you must make up the gap in cash, renegotiate, or walk — a real risk in fast-rising Michigan markets where offers outpace comparable sales. Government loans add wrinkles: FHA and VA appraisals also check health-and-safety items, which can flag peeling paint or well and septic issues on older or rural Michigan homes.
Common questions
What if the appraisal comes in low?
You make up the gap in cash, renegotiate the price, or walk if you kept an appraisal contingency — a real risk in fast-rising Michigan markets.
Who pays for the appraisal?
The buyer, usually $500–$700, paid during the loan process. Rural and Upper Peninsula properties can run higher.
How is an FHA or VA appraisal different?
They also check health-and-safety items, which can flag peeling paint or well and septic issues on older or rural Michigan homes.
Related terms