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NewHow the Home Appraisal Process Works in Minnesota (and What Happens If It Comes in Low)
What a mortgage appraisal actually checks, how long it takes, who pays for it, and your real options if the appraised value comes in under your offer price.
Quick Answer
A home appraisal is an independent, licensed valuation ordered by your lender (not you or the seller) to confirm the home supports the loan amount you're borrowing. It typically happens after your home inspection, takes 30-60 minutes on-site plus a few days for the written report, and costs a few hundred dollars, usually paid by the buyer. If the appraisal comes in at or above your offer price, your loan moves forward as planned. If it comes in low, you generally have a few options: renegotiate the price with the seller, bring additional cash to cover the gap, dispute the appraisal, or in some cases exercise an appraisal contingency to walk away — which option makes sense depends on your specific purchase agreement and market conditions.
Key Takeaways
- An appraisal is ordered by your lender, not you — it protects the lender's interest in the loan by confirming the home is worth what you're paying.
- It's a separate step from the home inspection: an inspection assesses condition, an appraisal assesses value, and they don't automatically inform each other.
- A low appraisal doesn't automatically kill a deal — buyers typically have several options depending on their purchase agreement's appraisal contingency.
- Appraisal fees are typically paid by the buyer, usually a few hundred dollars, and are collected as part of your closing costs.
- An appraisal contingency in your purchase agreement is what actually protects you if the value comes in low — confirm it's included before you rely on it.
Buyers often assume that once an offer is accepted, the price is settled. It isn't — not until an independent appraiser confirms the lender is actually justified in loaning that amount against the home. Here's how that process really works, and what your real options are if the number comes back lower than expected.
What an Appraisal Actually Is
An appraisal is a professional, independent estimate of a home's market value, ordered by your lender — not by you, your agent, or the seller. Its purpose is narrow but important: confirming that the loan amount being borrowed is actually supported by the home's value, which protects the lender if the loan were ever to go into default.
An appraisal isn't the same as an inspection
It's easy to conflate the two, but they answer completely different questions. A home inspection asks "what condition is this home in?" An appraisal asks "what is this home actually worth?" They're performed by different professionals, at different points in the process, and one doesn't substitute for the other.
Who Actually Does the Appraisal
Your lender assigns a licensed, independent appraiser — typically through an appraisal management system specifically designed to prevent any party with a financial interest in the sale from influencing the outcome. Neither you, your agent, nor the seller selects who performs it.
- 1
Loan application and offer acceptance
Once your offer is accepted and your loan application is underway, your lender orders the appraisal — typically after the inspection period.
- 2
Appraiser assigned
An independent, licensed appraiser is randomly assigned through the lender's appraisal management process — no one involved in the sale selects who does it.
- 3
On-site visit
The appraiser inspects the home's condition, size, and features, and researches recent comparable sales nearby, typically a 30-60 minute visit.
- 4
Written report delivered
The appraiser submits a formal report with the home's appraised value to your lender, usually within a few days to two weeks.
- 5
Lender reviews and finalizes your loan
If the value supports your loan amount, underwriting proceeds normally. If it comes in low, your lender will notify you and your agent so you can decide next steps.
Dave's Local Insight
I let buyers know roughly when to expect the appraisal to be ordered and how long it typically takes in our specific market, so a normal part of the timeline doesn't feel like a surprise or a red flag when it happens.
What the Appraiser Actually Looks At
Typically 30-60 minutes
On-Site Visit
A few days to ~2 weeks
Full Process Time
Typically the buyer
Who Pays
Your lender
Who Orders It
The appraiser evaluates the home's size, condition, layout, and features, then compares it against recent sales of genuinely similar homes nearby — factoring in adjustments for differences in lot size, updates, and condition. This is conceptually similar to the comparative market analysis your agent may have already run, but it's an independent, licensed opinion specifically for lending purposes, not a marketing tool.
What Happens When the Appraisal Comes in Low
This is the scenario buyers worry about most, and it's worth understanding calmly: a low appraisal is a real, if not everyday, occurrence — and it doesn't automatically mean your deal falls apart.
A low appraisal isn't necessarily a sign something's wrong
Appraisals can come in below an accepted offer for reasons that have nothing to do with the home's true value — a competitive multiple-offer situation that pushed the price above recent comps, a fast-moving market the appraiser's data hasn't caught up to, or genuinely limited comparable sales in a specific area. It's worth understanding why before assuming the worst.
| Option | What It Means |
|---|---|
| Renegotiate with the seller | Ask the seller to reduce the price to match the appraised value, splitting the difference, or some other compromise |
| Bring additional cash | Cover the gap between the appraised value and your offer price out of pocket, since lenders base your loan on the lower of the two |
| Dispute the appraisal | Your agent can submit additional comparable sales the appraiser may have missed, requesting a reconsideration of value |
| Exercise an appraisal contingency | If your purchase agreement includes one, you may be able to walk away from the deal without losing your earnest money |
Dave's Local Insight
Whether an appraisal contingency is included — and exactly how it's worded — is something I always confirm before a buyer writes an offer, especially in a competitive situation. It's the single biggest factor in what your real options are if the value comes in low.
Can You Prevent a Low Appraisal?
Not entirely — appraisals are, by design, independent of buyer and seller influence. But a few things genuinely help:
What actually helps avoid appraisal surprises
- Work with an agent who prices offers based on real comparable sales, not just what it takes to 'win' a multiple-offer situation
- Provide your appraiser's contact (through your lender) with a list of recent comps if your agent has ones the appraiser might not easily find
- Understand your appraisal contingency terms before you're in a time-sensitive negotiation
- Keep a cash reserve beyond your down payment in case you need to cover a value gap
A Simple Way to Think About It
Does your purchase agreement include an appraisal contingency?
Yes
You have a documented option to walk away or renegotiate if the value comes in low, without automatically losing your earnest money.
No
Understand this risk clearly before writing your offer — ask your agent whether waiving it makes sense for your specific situation and market.
Did your appraisal come in below your offer price?
Yes
Talk to your agent about which of the four main options fits your situation before assuming the deal is over.
No
Your loan can proceed through underwriting on the normal timeline.
Where to Go From Here
An appraisal is one of the last independent checks between you and closing day — understanding it ahead of time means it's just another step in the process, not a surprise. If you're preparing to make an offer and want to understand your specific appraisal contingency options, reach out directly before you're in the middle of a time-sensitive negotiation.
Dave's Local Insight
If you haven't already grabbed it, the Woodbury Home Buyer's Checklist walks through appraisal, inspection, and every other milestone between an accepted offer and closing day — worth reviewing before you start touring homes seriously.
Sources
Written by Dave Brown
REALTOR®, LPT Realty
Dave Brown is a REALTOR® with LPT Realty who has spent his career helping families buy, sell, and settle into life in Woodbury, Minnesota and the surrounding East Metro. He writes Woodbury Living as a local resource first and a business second — every guide is meant to leave you better informed, whether or not you ever work together.
Need help buying or selling in Woodbury?
Book a no-pressure consultation with Dave to talk through your specific situation — no obligation, just straight answers.
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