When you apply for a mortgage, the lender needs to know that the home you’re buying is actually worth what you agreed to pay. That’s where the appraisal comes in. For many Pennsylvania buyers, the appraisal is one of the least understood steps in the process — and one that can make or break a deal if you’re not prepared.
What Is a Home Appraisal?
A home appraisal is a licensed appraiser’s professional opinion of a property’s current market value. The lender orders it — you don’t pick the appraiser — but you, as the borrower, pay for it. In Pennsylvania, appraisal fees typically run $500–$800 for a standard single-family home, though complex properties or rural locations can run higher.
The appraiser works independently. Their job is to protect the lender by confirming the collateral (the home) is worth the loan amount.
What Appraisers Look At
Appraisers don’t just walk through and guess. Their analysis is structured and documented:
- Comparable sales (comps): Recent sales of similar homes, typically within 1 mile and sold within the past 6–12 months. This is the core of the valuation.
- Condition: Overall state of the home — roof, foundation, HVAC, plumbing, electrical. Deferred maintenance or visible damage can reduce value.
- Square footage: Measured against comps. Finished vs. unfinished space is treated differently.
- Bedroom and bathroom count: Adds or subtracts value relative to comps.
- Updates and improvements: Renovated kitchens, new bathrooms, updated systems can support a higher value — but only if comps support it.
- Location factors: School district, proximity to amenities or negatives (highways, industrial areas), neighborhood trends.
What Happens If the Appraisal Comes In Low?
A low appraisal means the appraiser valued the home below the purchase price. This is a real problem because lenders will only lend based on the appraised value, not the contract price. You have several options:
1. Renegotiate the purchase price. The seller may agree to lower the price to the appraised value, especially if they want the deal to close.
2. Cover the gap in cash. If you believe the property is worth the purchase price, you can pay the difference out of pocket. This is common in competitive markets.
3. Cancel the transaction. If your contract includes an appraisal contingency (standard in most PA purchase agreements), you can walk away and get your earnest money back.
4. Request a Reconsideration of Value (ROV). You can formally ask the appraiser to reconsider the valuation if you have evidence they missed a comp or made an error. This is not a guarantee, but it’s worth pursuing if you have a strong case.
FHA Appraisal Standards
FHA appraisals are more stringent than conventional appraisals because they include a property condition assessment on top of the value determination. The appraiser is looking for:
- No peeling paint on interior or exterior (lead paint concern)
- Working HVAC — the system must be functional
- No active roof leaks or significant structural issues
- No safety hazards — broken stairs, missing handrails, exposed wiring
If the appraiser identifies problems, the lender may require repairs before closing. This can delay your timeline. Sellers who have deferred maintenance should know that FHA buyers will trigger a closer look.
VA Appraisal and Minimum Property Requirements (MPRs)
VA loans have their own appraisal process conducted by VA-approved appraisers. They assess both value and whether the property meets Minimum Property Requirements (MPRs) — safety, structural integrity, and sanitary conditions. Common MPR issues include:
- Inadequate roof life remaining
- Evidence of wood-destroying insects
- Inoperative mechanical systems
- Water supply or sewage issues
Like FHA, a VA appraisal that flags issues can require repairs before the loan closes.
When Can the Appraisal Be Waived?
On some conventional loans, Fannie Mae or Freddie Mac may approve an appraisal waiver (also called a property inspection waiver or PIW). This typically applies when:
- The buyer is putting down 20% or more
- The property type is a standard single-family home
- The automated underwriting system has strong data on the property
An appraisal waiver saves time and the $500–$800 fee, but not every transaction qualifies.
A Note on PA Transfer Tax
In Pennsylvania, transfer tax is typically 2% of the sale price (1% state, 1% local — though Philadelphia and some other municipalities vary). The appraised value doesn’t directly determine transfer tax, but it affects what the transaction is structured around. If a purchase price is adjusted after a low appraisal, the recorded sale price — and the transfer tax — changes accordingly.
Frequently Asked Questions
Q: Can I choose my own appraiser? A: No. For any mortgage transaction, the lender orders the appraisal independently. This is required under federal appraisal independence rules. You can’t select or instruct the appraiser.
Q: How long does a home appraisal take in Pennsylvania? A: The appraisal inspection itself typically takes 30–60 minutes on-site. The written report usually comes back within 5–10 business days after the inspection, though timing varies with appraiser workload and market activity.
Q: What if I disagree with the appraisal? A: Ask your loan officer to submit a Reconsideration of Value (ROV) request. You’ll need documentation — comparable sales the appraiser may have missed, evidence of an error in the report, or other factual support. The appraiser reviews it and may or may not change the value.
If you have questions about the appraisal process or want to understand how it fits into your specific loan scenario, contact Dynamic Funding Solutions. Lena Polnet is a licensed mortgage broker in Pennsylvania and Florida who can walk you through what to expect.
Call (215) 364-7171 or visit dynamicfunding.net
Lena Polnet, NMLS #17225 | Dynamic Funding Solutions, NMLS #17144 | Licensed in PA and FL. This post is for educational purposes only and does not constitute a commitment to lend.