If the purchaser of your home is obtaining a mortgage, the lender will require an appraisal. An appraisal is an opinion of the market value of your home that helps the lender confirm that the purchase price aligns with the loan amount. This process is initiated by the lender and conducted by a certified third-party appraiser who does not represent the buyer or the seller. Their sole responsibility is to provide a fair and accurate valuation of the property.

Why Does the Lender Require an Appraisal?

The lender uses the appraisal to establish the loan-to-value (LTV) ratio, which is the percentage of the home’s price being financed. If the buyer is paying cash, an appraisal is not required, but the buyer may choose to have one conducted. In some cases, a buyer may waive the financing contingency to make their offer more attractive.

How Does the Appraisal Process Work?

The appraiser evaluates several factors, including:

• The home’s condition
• Any improvements made
• Location
• Recent sales of comparable properties (MLS data)
• Size, amenities, and other unique characteristics

Whatever method the appraiser uses, it must be independent, unbiased, and supported by evidence. The lender cannot meet or communicate directly with the appraiser. However, as your agent, I make it a priority to meet the appraiser to provide relevant comparable sales data (comps) and highlight the unique and valuable features of your home. Additionally, I ensure all my listings are professionally measured beforehand to provide accurate square footage, a detail appraisers greatly appreciate.

What Happens After the Appraisal?

The buyer will receive a copy of the appraisal, but they are not required to share it with you unless there is a significant discrepancy. If the buyer believes the valuation is incorrect, they can request a reconsideration of value (ROV) to have the appraisal reviewed. This could become another negotiation point, as the buyer may request a price adjustment based on the appraisal.

Understanding the appraisal process can help you feel more confident and prepared as you move forward with the sale of your home. If you have any questions or concerns, I’m here to guide you every step of the way!