Home Appraisals 101

    A home appraisal can be a cause of stress for both buyer and seller. If an appraised value comes in substantially lower or higher than the agreed-upon sale price, both sides may have to renegotiate. Let’s look at what determines the appraised value and explore some tips for sellers to move successfully toward a closing.

    As a buyer, you should be mindful that an appraisal contingency will help to determine the loan amount that your lender will approve. If the home under contract appraises at less than your offer price, your options are to (1) make up the difference in price by finding additional funds to pay the amount between your down payment and your loan unless the seller agrees to lower the price (a rare occurrence when multiple offers, backup offers, and a competitive market are in place) or to (2) back out of the deal per the appraisal contingency. With option #2, you can regain your earnest money deposit as long as you meet the deadlines and terms of your offer.

    What happens during a home appraisal? Typically, the lender contacts a licensed appraiser, who visits the property to conduct an inspection. The appraiser will look at the “comps” – similar, nearby properties that have recently sold – to determine the local real estate market and include that as a factor in deciding the property’s value. Additional factors include the property’s condition, upgrades, additions, value-adding or detracting features, and lot size. Finally, the appraiser completes a report of all his findings with an appraised home value.

    As a seller, what can you do to ensure your best-appraised value?



    Search online real estate sites and public property records for homes similar to your own that have sold in the last six months. Restrict your search to within a few miles of your location and with a similar, layout, square footage, upgrades, and condition. This process will assist in determining what you might expect from your own market value and help you decide if you should make any improvements.


    Honestly, all homeowners have a to-do list of projects, great or small, that they hope to complete. Try to get what you can done before the appraisal; this might include a running toilet, a squeaky door, a stuck window, or a stuck garbage disposal. These minor items add up to the overall condition of the home. Take an objective look at your home and do the small things that might add up.



    The appearance of your home may make a difference in your overall value. First address anything that is functional, such as clogged gutters or loose shingles. Next, take care of aesthetic issues, such as clear, well-lit pathways; a decorative wreath or potted plants near the front door; a freshly-cut lawn; and weeded, mulched garden beds. Here’s more details on how curb appeal affects the value of your home.


    A full remodel may be a gamble, but smaller upgrades are usually worth the effort. A fresh coat of paint, newer fixtures, or the replacement of an out-of-date bathroom vanity may not be very costly but may improve value. Try to choose projects that can be handled on a day off or a weekend. Here are 10 upgrades to increase your home value for under $1000.



    Gather purchase or contractor receipts or other documentation of any improvements you’ve made during the time you’ve owned the home. Include approximate dates and be sure to list all upgrades that may help the appraiser.


    Be sure that your home is spotless for the appraiser’s visit. Understandably, there is some subjectivity involved in this process, and clean shows much better toward overall condition than a property that seems dirty or cluttered. Here are 15 cleaning hacks for people who hate to clean.


    While you might be tempted to give the appraiser a tour, resist this urge and give him space. He does this often and knows what to look for; you do not want to annoy him with your shadowing or hurt your appraisal by accidentally giving negative information. Be polite and available to answer questions that may be asked at the end of the visit.

    If you have questions about the home appraisal process, don’t hesitate to reach out! We’d love to help.


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