What Is Appraiser?
An appraiser is the person who produces an appraisal — a licensed professional who inspects a property, pulls comparable sales (comps), and issues a written report stating fair market value. Lenders require an appraisal before funding a purchase or refinance. You don't choose the appraiser — the lender does. Their number sets your LTV and, on a BRRRR refinance, how much equity you extract. Your ARV estimate and the appraiser's value should land within 5%. If they don't, your comp selection was off. The appraiser's number is the one that counts. Cost: typically $400–$600 for a single-family, more for multifamily.
A licensed professional who evaluates a property's condition, comparable sales, and market data to determine its fair market value.
At a Glance
- What it is: A licensed professional who inspects properties, analyzes comps, and issues a formal appraisal report.
- Why it matters: The appraiser's number controls your loan amount — on purchase and refinance. You can't fund above it.
- Who orders: The lender. You pay. You don't pick the appraiser.
- Your ARV vs their number: Same comp-based methodology. Your ARV and the appraisal should be within 5%. If not, you're overestimating.
- Cost: $400–$600 single-family; more for multifamily or complex properties.
How It Works
The lender hires or approves a certified appraiser. The appraiser inspects the property — interior, exterior, condition, finishes. They pull comparable sales from the MLS (or public records in thin markets). They apply standardized adjustments — size, condition, location, date of sale. They issue a written report with a stated value. That number is what the lender uses. You don't control it.
Same methodology as your ARV. When you underwrite a deal, you estimate ARV using sold comps. The appraiser does the same thing — but they've got MLS access, follow lender guidelines, and their number is binding. If you're consistently 10% above appraisals, you're overestimating. Conservative investors target the middle of the comp range, not the top.
Purchase. The lender orders the appraisal after you're under contract. If it comes in at or above your purchase price, you're good. If it comes in low, the lender won't fund above that number. You renegotiate, cover the gap in cash, or walk.
Refinance. This is where appraisers matter most for investors. On a BRRRR cash-out refinance, the appraiser values the property at its post-rehab value. At 75% LTV, your loan amount = appraisal × 0.75. A $200,000 appraisal gets you $150,000. A $185,000 appraisal gets you $138,750 — that's $11,250 less equity extracted. The appraiser's number controls everything.
As-repaired vs as-is. For rehab deals, some lenders order an "as-repaired" appraisal — the appraiser values the property as if renovations are complete. That number drives your refinance. Your ARV estimate during underwriting should align with what a conservative appraiser would conclude.
Real-World Example
Memphis BRRRR deal.
You buy a 3-bed ranch for $92,000, rehab for $38,000. Your ARV estimate: $165,000 based on 4 sold comps. Six months later you refinance.
The lender assigns an appraiser. The appraiser inspects, pulls 3 comps — two match yours, one is a foreclosure that sold 8% below market. The appraisal comes in at $158,000. That's $7,000 under your estimate.
At 75% LTV: $158,000 × 0.75 = $118,500. Your all-in cost was $130,000. You recover $118,500 — $11,500 stays in the deal. Your cash-on-cash return is still solid, but you didn't get the full capital recycle you modeled. The 4% appraisal shortfall cost you $5,250 in loan proceeds.
If the appraisal had matched your ARV: $165,000 × 0.75 = $123,750. You'd have recovered $6,250 more. That's why conservative ARV estimation matters — the appraiser's number, not yours, sets the ceiling.
Pros & Cons
- Unbiased third party — validates or challenges the purchase price. Protects you from overpaying.
- Lenders require it — you can't get conventional or DSCR financing without one.
- Same methodology as your ARV — if your comps were sound, the numbers should align.
- Gives you leverage in negotiation — a low appraisal is ammunition to renegotiate with the seller.
- Documents value for equity tracking and portfolio analysis.
- You don't control it — the appraiser's comp selection and adjustments can differ from yours.
- Costs $400–$600+ — adds to closing costs on every purchase and refinance.
- Can kill deals — a low appraisal with an unwilling seller means you walk or pay the gap.
- Timing — appraisals add 5–10 days to the closing process.
- Thin comp markets — rural or unique properties get wider variance between appraisers.
Watch Out
- Modeling risk: Don't assume your ARV and the appraisal will match. Conservative investors target the middle of the comp range, not the top. A 5% shortfall on a $200,000 property = $7,500 less on a 75% LTV refinance.
- Execution risk: Order the appraisal early in the refinance process. If it comes in low, you've got time to contest (costly, slow) or line up a backup lender. Don't discover a shortfall the week before your hard money balloon.
- Compliance risk: You can't influence the appraiser. Don't try. Pressuring an appraiser to hit a number is illegal. Provide comps if the lender allows — but the appraiser makes the call.
- Exit risk: In BRRRR, the refinance appraisal is your exit. If it's low, you're either leaving equity in the deal or extending your hard money term — and those extension fees add up fast. Know your lender's appraisal dispute process before you need it.
Ask an Investor
The Takeaway
An appraiser is the licensed professional who produces the appraisal — the number that controls your loan amount. You don't pick them. You don't control their comp selection. You can only prepare: estimate ARV conservatively, use sold comps (never listings), and target the middle of the range. If the appraisal comes in low, you've got options — renegotiate, cover the gap, or walk. But the best move is not needing those options in the first place. Your ARV and the appraiser's number should be within 5%. If they're not, tighten your underwriting.