Understanding Home Appraisals: What Every Buyer Needs to Know

Home Buying Series – Part 6 of 7

Congratulations! Your Offer Was Accepted.

After weeks—or sometimes months—of searching for the right home, having your offer accepted is an exciting milestone.

Many buyers think the hardest part is over. While you’re getting closer to the finish line, there are still a few important steps before closing. One of those steps is the home appraisal.

Understanding how the appraisal process works can help you feel more confident if unexpected questions arise.

What Is a Home Appraisal?

A home appraisal is an independent opinion of a property’s market value. The lender orders the appraisal to help ensure the home’s value supports the loan amount.

It’s important to remember that an appraisal is different from a home inspection.

• A home inspection evaluates the home’s condition and identifies potential repairs or safety concerns.
• A home appraisal estimates the home’s market value by comparing it to recently sold homes with similar features.

Most appraisals come in at the agreed-upon purchase price, and the transaction moves forward without any issues.

Occasionally, however, an appraisal comes in lower than expected. When that happens, it doesn’t automatically mean the sale is over.

That’s where experience, communication, and knowledge of the local market can make a difference.

Looking Beyond the First Appraisal

Recently, I represented the sellers of a home being purchased with a VA loan. The appraisal came in $35,000 below the agreed-upon sales price.

After carefully reviewing the report, I spent nearly 90 minutes discussing the comparable sales with the appraiser. Although we didn’t reach the same conclusion, I believed there was additional market information the lender should consider.

I prepared a detailed reconsideration of value, providing more comparable sales than were required and explaining why I believed they better reflected the home’s market value.

The lender carefully reviewed the additional information and ultimately agreed to move forward with the loan based on the contract sales price.

That experience reminded me that facts, preparation, and persistence matter. Sometimes helping your clients means doing the extra work behind the scenes to ensure every reasonable opportunity has been explored.

Working Together for a Successful Closing

In another transaction, I represented the buyers when the appraisal also came in below the purchase price.

Instead of treating the situation as a setback, the listing agent and I worked together to identify additional comparable sales that better supported the home’s value.

The updated information was submitted for review, and my buyers were able to purchase the home they had dreamed of owning.

That transaction was a great reminder that the best results often come when real estate professionals work together with a common goal—helping buyers and sellers reach the closing table.

Marsha’s Tips

• Don’t panic if an appraisal comes in lower than expected.
• Every transaction is unique, and there may be more than one solution.
• An experienced REALTOR® can help gather market data, communicate with the lender, and guide you through the available options.
• Staying calm and focusing on facts often leads to the best outcome.

Final Thoughts

An appraisal is an important step in the home-buying process, but it doesn’t have to be a stressful one.

Whether everything goes exactly as planned or an unexpected challenge arises, my goal is always the same: to help my clients understand the process, explore every reasonable option, and move forward with confidence.

Buying a home is one of life’s biggest investments, and you deserve someone who will be there to guide you every step of the way.

Marsha’s Tip

The appraisal is one opinion of value based on available market data. If questions arise, don’t assume the transaction is over. Sometimes the right information—and the right guidance—can make all the difference.

Putting You 1st Is 2nd Nature!