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What is it?
A home appraisal is an unbiased evaluation report of a property’s market value. Typically, home appraisals are used by lenders to determine the value of the asset (home) on which they are being asked to lend.  Appraisers must follow set criteria and processes which rely heavily upon data to determine value.  The primary source of this data is recent sales of equivalent homes in the subject home’s immediate area.

Who does it?
Appraisals are conducted by home appraisers.  They are highly-trained professionals who are licensed and/or certified to determine the value of a home.

When does a home appraisal happen?
While the mortgage and home buying process can vary slightly from person to person, a home appraisal usually takes place after a buyer and seller have signed a purchase agreement.

Who orders and pays for it?
For mortgage purposes, a buyer’s lender orders the appraisal during the mortgage loan process.  The cost of the appraisal is typically passed along to the buyer as a fee at closing.

What is the appraiser looking for?
Ultimately, an appraiser is determining if the property is worth the amount of money the borrower is seeking to borrow.  They are working on the lender’s behalf.  Appraisers take a close look at age of the home, updates to the property, size of the home, characteristics of the neighborhood and general property condition.  Much of their analysis is done on a computer after they have toured the home and taken measurements, pictures, and notes.

What is not considered?
Features that don’t influence the value of a property are things such as decor, furniture, and dirty dishes which will not be taken into consideration.

Who gets to look at it?
The buyer, the buyer’s real estate agent and the buyer’s lending institution have access to the appraisal.  Because the appraisal is paid for by the buyer they are not compelled to share it with the seller or listing agent.

Is my real estate agent involved in my home appraisal?
Your real estate agent is not able to directly influence an appraisal, but they can help provide data that the appraiser may be unaware of.  Fazendin agents try to be helpful by providing an appraiser with certain information.  For example:

  • A list of itemized home improvements. A new roof or insulation may not be noticed by an appraiser unless it is pointed out. While these do not represent a dollar for dollar increase in value, they are taken into consideration.
  • List of neighborhood attributes and improvements. Highlight new schools, new roads, park improvements, etc.
  • Provide information regarding non-MLS sales and neighborhood trends.  No one knows the inside scoop as well as a resident.  Let your agent know about sales that were not recorded on MLS, such as a for sale by owner

What can I do to potentially increase my home appraisal?
A homeowner can positively influence an appraisal by improving the home’s condition. Examples include:

  • Fix leaky faucets and broken windows.
  • Remove or clean dirty carpeting.
  • Remove any unappealing odors.
  • Repair plaster cracks, water-stains, cracked ceilings, etc.
  • Mow your grass and trim your trees and shrubbery. Remove clutter from both the front and backyards, including stray toys, bicycles, and lawn furniture. Thoroughly weed flowerbeds.
  • Make sure you have all the necessary safety equipment, such as smoke alarms, installed and working properly.
  • Power wash decks, driveways, and the exterior of your home.
  • Have a clean home for the appraisal. While an appraiser will not take dirty dishes into consideration for value, it never hurts to make a good first impression.

What is the difference between an appraisal and an assessment?
Assessments are a function of a municipality to determine property values for tax purposes. Assessments are conducted by assessors that are employed or contracted by the municipality.  Generally, assessments are less accurate than appraisals.

What is an “appraisal gap” and an “appraisal gap clause”?
An “appraisal gap” is the difference between the appraised value of a home and the purchase price in the sales contract.

An “appraisal gap clause” is used in a sales contract to guarantee that the home buyer will cover the monetary gap between the appraisal and the sales contract if an appraisal gap becomes an issue. 

Do you have more questions about appraisals?
Contact us; We are happy to help in any way we can.

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