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If you’re looking to buy or sell a home and don’t have much knowledge about the appraisal process, now is the time to learn more.

To help you understand the home appraisal industry, we’ve compiled some information on what a home appraisal is, what to expect from the process and why getting an appraisal in rural areas can sometimes take longer than in non-rural areas.

What’s an Appraisal?

So an appraisal is an estimate of how much your property is worth – it sets the amount that lenders will let you borrow for a property.

If an appraiser determines that a home is worth $150, 000, a mortgage company won’t lend someone more than $150, 000 to purchase that property, and would probably lend less, as 100% financing is rare. The appraiser’s job is to let the lender and the potential buyer know how much the house is worth.

How Does the Appraisal Process Work?

When an appraiser comes to your property, they gather all the information about it, including taking pictures and measurements. Then they research the housing market and find comparable properties that are up for sale or recently sold.

A comparable property is one that is similar to the property you’re selling. So if your home has two bedrooms, then the appraiser is going to keep an eye out for two-bedroom homes to compare it to.

How exactly is an appraiser selected? A lender selects an appraisal management company (AMC) to work with. Your given AMC selects an appraiser for you. The AMC will assign an appraiser who has knowledge of your type of property within the market area. The appraiser will come to your house to make sure that the value they’re putting in the appraisal is accurate.

According to Tal Frank, who has worked in residential lending for 20 years and is the president of PhysicianLoans of Ohio, when the appraiser completes the report, it will be sent to the AMC for review. If there are mistakes, corrections are made by the appraiser. Once approved, the appraisal is sent to the lender, which then reviews the report. If there are any errors in the report, it will be sent back to the AMC for changes. If it’s good to go, the lender will deliver a copy of the report to you.

“Typically appraisals are required because the lender needs to have a value for the collateral-based loan that they are giving, ” says Mike Brocker, a licensed real estate appraiser with Title Source. “Without that appraisal, the lender has no idea if the collateral is enough to secure that loan.”

Delayed Appraisals in Rural Areas

If you live in a rural area and want to get an appraisal, the process can take longer than you might expect. Since there aren’t as many appraisers in rural areas, it can take months to get an appraisal done because of a supply-and-demand issue. For example, in states such as Oregon, Colorado and Washington, there is unfortunately a lack of appraisers.

“There are just not enough appraisers to go around, and they have a big area to cover, ” says Sam Heskel, president of Nadlan Valuation, an AMC. “This will have a real impact on the mortgage and home buying industries. Closings will be delayed, maybe by several weeks, depending on the area.”