Whether you’re buying or selling a home, the appraisal plays a major role. It helps determine the property’s fair market value, which lenders use to confirm the loan amount is appropriate. Knowing what the process includes can help you avoid surprises.
Exterior and structural features
The appraiser begins by evaluating the exterior. This includes the size of the lot, condition of the roof, siding, foundation, and overall structure. Signs of damage, poor drainage, or cracks in the foundation may lower the value. Detached garages, porches, or outdoor upgrades can add to it.
Interior condition and layout
Inside, the appraiser measures square footage and notes how many bedrooms and bathrooms the home has. They also examine the flooring, lighting, cabinetry, appliances, and general upkeep. Renovated kitchens or updated bathrooms usually increase value, while worn or outdated interiors may reduce it.
Comparable home sales
To determine fair market value, the appraiser compares your home to recently sold properties nearby. These “comps” must be similar in location, size, age, and features. Adjustments are made based on differences, such as a larger garage or an added sunroom. This comparison helps keep the estimate realistic.
Location and neighborhood
Appraisers also consider the surrounding area. Factors like school quality, access to public transportation, nearby amenities, and overall neighborhood condition matter. High crime rates, heavy traffic, or declining property values can reduce the home’s worth, even if the house itself is well-maintained.
Why the appraisal matters
Appraisals protect lenders and buyers from overpaying. If the appraised value is lower than the offer, it may lead to a price negotiation or delay the sale. Understanding how appraisers evaluate homes helps you stay better prepared throughout the process.
