Home Appraisal 101: The Basics

Appraisal basics 

• Home appraisals are used during the home purchase process, in addition to most refinancing scenarios. 

• A home appraisal is an unbiased estimate of the fair market value of a home.  

• Lenders may require an appraisal to confirm the value of the home being financed.

• Appraisers are licensed professionals who evaluate a home’s value. 

What happens during an appraisal? 

The appraisal may seem overwhelming, but it’s a straightforward process. Here’s what to expect: 

• Scheduling the appraisal: Once you’ve secured a lender, and after any repairs identified by the home inspection are complete, your lender will order the appraisal. 

• The onsite visit: During the visit, the appraiser will evaluate the entire home, both interior and exterior, taking notes and photos documenting the property’s condition.  

• Reviewing comparable sales: After the visit, the appraiser will research recent sales of similar homes in the area (called “comps”). To be considered a comp, the home must be a recent sale, nearby and similar in size. 

• Receiving the appraisal report: The appraiser will compile a report with the estimated value of the home. The lender will review the report and share it with you.  

• Moving forward: If the appraisal meets or exceeds the purchase price, you can move forward with the loan. If the appraiser's evaluation is lower than the purchase price, depending on your down payment you may need to renegotiate the purchase price with the seller, or provide additional cash. If during the refinancing of your current mortgage, the appraisal is a higher value, you may be able to access more cash or get better loan terms. 

What factors are considered in an appraisal? 

When it comes to determining the value of a home, several key factors are considered: 

• Location: Appraisers look at the neighborhood, school district, proximity to amenities and the overall condition of nearby homes.  

• Size and layout: The size of a home plays a major role in its value. Larger homes with more bedrooms and bathrooms tend to be appraised at a higher value.  

• Condition of the home: Appraisers assess the overall condition of the home, including the quality of materials, the state of the roof, foundation, windows and more.  

• Comparable sales: Appraisers examine recent sales of similar homes in the area. 

What homebuyers should notice beyond appraisal value 

Although certain improvements may not increase the appraised value of a home, they can still be an incentive to purchase the home and make it easier to settle in: 

• New roof, HVAC system and energy-efficient windows: A new roof, updated HVAC system or upgraded energy-efficient windows can make a home much more appealing.  

• Updated kitchens and bathrooms: Renovating a kitchen or bathroom certainly has a positive impact on the value of your home and can make your home much more desirable for buyers. Just keep in mind that your return on investment may not equal the exact dollar amount you put into the improvements. 

• Landscaping and curb appeal: First impressions count! A well-maintained yard, fresh landscaping and a clean exterior can go a long way in making a house a home.  

Understanding how a home is valued during an appraisal is helpful in the homebuying or refinance process. The key is to remember that appraisers are looking at overall market value based on location, size and condition. Knowing a home’s value can help you make informed decisions and set you on the path to homeownership success. 

The Carrington family of companies, including real estate brokerage Vylla Home, is a seamless one-stop shop for all your homeownership needs. If you’re considering selling your current home or have your eye on a new dream home, a trusted Vylla Home real estate advisor can prepare a free, no-obligation comparative market analysis (CMA) with an estimated value of the property. Are you ready to take the next steps? We’re here to help; contact us today!