The Home Appraisal, Explained: What Buyers and Sellers Should Expect
Daniel ParkNo. 39
Updated
Key takeaways
- An appraisal is an independent opinion of value that protects the lender, and it usually happens a week or two after you go under contract.
- Appraisers lean most on recent, nearby sales of similar homes, then adjust for size, condition and features.
- A low appraisal doesn’t automatically end a deal. Buyers and sellers can renegotiate, split the gap or ask for a reconsideration of value.
- Sellers can help by sharing a list of upgrades and making the home easy to see.
You found the right home, your offer was accepted, and then comes a step many buyers forget about: the appraisal. It can feel like a test you can’t study for. The good news is that it follows a clear process, and knowing that process helps you plan for every outcome.
What is a home appraisal?
A home appraisal is a licensed appraiser’s opinion of what a home is worth on the open market. If you’re using a mortgage, your lender orders it, because the lender wants to be sure the home is worth at least what it’s lending. The buyer usually pays for it as part of closing costs.
An appraisal is not the same as a home inspection or a tax assessment. Here’s the difference at a glance:
| Appraisal | Home inspection | Tax assessment | |
|---|---|---|---|
| Who orders it | The lender | The buyer | The county or city |
| What it answers | What is the home worth today? | What condition is the home in? | What value is used for property taxes? |
| Who it protects | The lender (and you, indirectly) | The buyer | The locality’s tax base |
How appraisers decide what a home is worth
Most residential appraisals use the sales comparison approach. The appraiser finds recent sales of similar homes nearby, called comparables or comps, and adjusts for differences. A finished basement, an extra bathroom or a renovated kitchen adds value. A busy road, an older roof or a smaller lot may subtract.
- Location: the same street or subdivision matters more than the same ZIP code.
- Size and layout: finished, above-grade living space carries the most weight.
- Condition and updates: major systems and recent renovations count more than paint colors.
- Timing: recent sales tell the truest story, especially when the market is moving.
Daniel’s tip: In Northern Virginia, two homes a mile apart can sit in very different submarkets. A townhome near a Metro station and a similar one 15 minutes away often have different comps, so a good appraisal depends on picking truly comparable sales.
What happens if the appraisal comes in low?
A low appraisal means the lender will base the loan on the lower number. That leaves a gap between the price and the appraised value. You have several options:
- Renegotiate the price. Sellers often prefer a modest reduction to starting over.
- Split the difference. Buyer and seller each cover part of the gap.
- Cover the gap in cash. Some buyers in competitive situations offer this up front as an appraisal gap guarantee.
- Ask for a reconsideration of value. If the appraiser missed a better comp or got a fact wrong, your lender can submit a formal request with supporting sales.
- Walk away, if your contract includes an appraisal contingency and you follow its deadlines.
How sellers can prepare
- Make a one-page list of upgrades with dates and costs, such as a new roof, HVAC system or kitchen.
- Have the home clean, decluttered and fully accessible, including the attic, crawl space and utility room.
- Share recent nearby sales that support your price through your agent.
- Fix small, visible issues like a broken window or missing handrail that can raise condition questions.
Curious what your home could appraise for? Start with an instant estimate, then I’ll review the comps with you.
Frequently asked questions
How long does an appraisal take?
The visit usually takes under an hour for a typical home. The written report often arrives within several business days, though busy seasons can take longer.
What if the appraisal comes in higher than my price?
That’s good news. You start with a little extra equity, and your price stays the same. The loan is still based on the lower of the price or the appraised value.
Does the appraisal change my property taxes?
No. Property taxes are based on the assessment your county or city sets each year, not your lender’s appraisal. Read more in Should you offer the tax-assessed value?
Filed under Buying a Home, Selling Your Home
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