On an investment property, the appraisal does two jobs: it establishes value, which drives your loan amount, and it documents market rent, which drives your coverage ratio. Both can affect whether the deal works.
These questions cover the process from order to delivery.
Quick answer
The lender orders the appraisal through an independent appraisal management company. For investment property it typically includes a rent schedule documenting market rent, which frequently determines your qualifying income.
Frequently Asked Questions
Who orders the appraisal?
The lender, generally through an appraisal management company to maintain independence. You cannot select the appraiser, and an appraisal you commissioned separately usually cannot be used.
Who pays for it?
The borrower, typically upfront or at closing depending on the lender. It is usually non-refundable once completed even if the loan does not close.
How long does it take?
Commonly one to three weeks from order to delivery, varying by market, property type, and appraiser availability. Multi-unit and unusual properties take longer.
What does the appraiser do?
Inspects the property, analyses comparable sales to conclude a value, and for investment property, analyses rental comparables to conclude a market rent opinion.
Does the appraiser go inside?
Typically yes for a full appraisal. Some programs permit exterior-only or desktop appraisals in limited circumstances, though these are less common on investment property.
What if the property is tenant-occupied?
Access must be coordinated with the tenant, with proper notice per the lease and state law. This is a frequent cause of scheduling delay.
Can I be present for the appraisal?
Usually yes, though you should not attempt to influence the outcome. Providing factual information about improvements or comparable data is acceptable; advocacy is not.
Should I provide information to the appraiser?
Factual documentation helps — recent improvements with costs, current leases, and genuinely comparable rental data. Present it as information, not as a request for a specific number.
What is a comparable sale?
A recently sold property similar to yours in location, size, condition, and features, used to establish value through adjusted comparison.
How recent do comparables need to be?
Generally within the past three to six months, though this varies by market activity. Thin markets may require reaching further back.
What if the appraisal comes in low?
The loan is sized on the lower value, meaning you bring more cash, renegotiate the price, request reconsideration with better data, or exit the contract if terms permit.
Can I get a second appraisal?
Sometimes, though lenders generally will not simply order another hoping for a better number. A reconsideration with supporting data is the usual path.
Does the appraiser see my purchase contract?
Typically yes. Appraisers commonly receive the contract, which some argue creates anchoring. It is standard practice.
How much does an appraisal cost?
It varies by property type and market. Single-family is least expensive; multi-unit, mixed-use, and rural properties cost more and take longer.
What is an appraisal management company?
A third party that assigns appraisers and manages the process, maintaining separation between the lender and the appraiser.
Can I use an appraisal from a prior transaction?
Generally not. Lenders order their own, and appraisals are typically valid only for the transaction and lender they were prepared for.
How long is an appraisal valid?
Commonly 90 to 120 days, though requirements vary. If your closing extends beyond that, an update or recertification may be required.
What is a recertification of value?
A limited update confirming the value remains supportable, used when an appraisal ages beyond the validity window during a delayed closing.
Does the appraiser assess condition?
Yes, and it affects both value and the rent opinion. Deferred maintenance or safety issues can result in a lower value or repair requirements.
What can I do to prepare?
Ensure access is arranged, the property is presentable, documentation of recent improvements is available, and any tenant coordination is handled well in advance.
