Understanding the Home Appraisal Process

Whether you're buying, selling, or refinancing a home, the appraisal is a critical step in the real estate journey. But what exactly is a home appraisal—and why does it matter so much?

Here’s a simple breakdown of how the home appraisal process works, who’s involved, and what it means for your transaction.

What Is a Home Appraisal?

A home appraisal is an unbiased estimate of a property's fair market value—conducted by a licensed professional appraiser. It’s usually ordered by the lender to ensure the property is worth the amount being borrowed.

In short: the lender wants to make sure the home is worth the price before approving the loan.

When Does the Appraisal Happen?

The appraisal typically happens after an offer is accepted and during the escrow or loan underwriting process.

For buyers:

• It’s required by the lender for mortgage approvalFor sellers:

• It can make or break the sale, especially if the home doesn’t appraise at or above the agreed purchase price

What Do Appraisers Look For?

Appraisers consider a wide range of factors to determine your home’s value:

Location

• Neighborhood quality

• Proximity to schools, parks, transportation, etc.

Property Details

• Square footage

• Number of bedrooms/bathrooms

• Lot size

• Condition and quality of finishes

• Curb appeal and layout

Comparable Sales (Comps)

• Recent sales of similar homes in your area (usually within the past 3–6 months)

• Adjustments are made for upgrades, square footage, and condition

What Happens if the Appraisal Comes In Low?

If the appraisal is lower than the purchase price, the lender will only approve a loan based on the appraised value. That means:

1. The buyer may need to pay the difference out of pocket

2. The seller may need to lower the price

3. Both parties may renegotiate

4. In some cases, the deal can fall through

Tip: Having a knowledgeable agent on your side can help navigate this situation and keep the deal alive.

What Happens if the Appraisal Comes In At or Above the Price?

That’s great news! If the appraisal meets or exceeds the agreed price:

• The loan proceeds as planned

• Everyone moves forward toward closing

Buyers get peace of mind that they’re paying fair market value—and sellers can feel confident about the price they set.

Can You Challenge an Appraisal?

Yes, if there are clear errors—like missing recent comps or incorrect square footage—you or your agent can request a reconsideration of value. However, this is not guaranteed to change the result.

Final Thoughts

A home appraisal protects both the buyer and the lender by ensuring the home is worth what’s being paid. While you can’t control every part of the process, understanding how it works helps you prepare and respond wisely if surprises arise.

Have questions about appraisals or want help prepping your home to appraise well? Let’s chat—I’m here to guide you through every step.