How the Appraisal Impacts a Home's Sale

by Allan Wulff, MBA. Ph.D. 08/23/2020

Image by Free-Photos from Pixabay

As the home buying process nears the closing, both buyers and sellers need to prepare for the appraisal. This often the last step the lender requires before approving financing for the buyer, so it’s an important part of the home sale process.

What is an Appraisal?

An appraisal is an unbiased, professional evaluation of the value of a home or other piece of real estate. It takes a look at the property, its physical characteristics and the local market conditions to determine the fair market value of a property.

How Is an Appraisal Different from an Inspection?

The appraisal is similar to an inspection, but it is a separate step. In an inspection, the inspector is looking at details about the home and its condition that make it safe or unsafe to live in. The inspector is also comparing the home to current building codes to make sure the home is up to current safety standards.

An appraiser is simply looking at the home’s market value. The appraiser has rigorous training to learn how to evaluate property values and puts that to work to evaluate yours.

How Does the Home’s Appraisal Impact the Home’s Sale?

Lenders want to know that they’re lending no more than the home’s actual value, because they don’t want to have a borrower upside down in a home loan at any point. If the home does not appraise for what the buyer is offering, the loan amount will not be approved. This either means the buyer can walk away or the buyer and seller can renegotiate the terms to match the appraised value.

How to Improve the Appraisal Value on a Home

Sellers who are worried that a home may appraise too low can take some steps to improve the appraisal value. Repairing cracks in the plaster or stains on the wall, for instance, before the appraisal can help improve its value. Odors and staining on the carpeting should also be addressed before the appraiser comes. Improving curb appeal and showing details about improvements and repairs that are high in value are also helpful in boosting the home’s potential value.

The home appraisal is a critical step, and often one of the last hurdles between initial offer and closing. Both sellers and buyers need to understand this step, so they can avoid unhappy surprises when the appraisal report comes back. If a home is competitively priced and well taken care of, the appraisal shouldn’t be a problem in the overall sale of the home.

About the Author
Author

Allan Wulff, MBA. Ph.D.

Hello and thank you for visiting! Selling or buying real estate is very serious business! I provide extraordinary results! Prior to real estate I was President/CEO of a number of area technology companies, Vice-Chairman of the INOVA Hospital Association and have been a long time member of the Association for Corporate Growth. With a broker’s training and experience, you get more than just a realtor agent. My negotiating skills and astute problem solving capabilities, honed by executive experience, have proved extremely effective for my clients in achieving their dreams and real estate goals in this current complex and fast paced market. As a long time Northern Virginia resident my experience will benefit you whether you are buying a home or selling a home or are a returning client checking out the many homeowner resources my associates and I offer. Buying a home? I look forward to helping you select the home of your dreams by taking time to listen to your needs and desires. Selling a home? My real estate expertise and many effective marketing programs will give you the exposure and edge you need to sell your home quickly for top dollar. Testimonials. I appreciate the opportunity to continue to serve you and hope you take advantage of the valuable resources I provide. Come back to visit often! I consider this community an excellent place to reside and would love to share with you my enthusiasm for the many neighborhoods in the area. I pride myself on providing unparalleled service and look forward to developing a long-term relationship with you. Please feel free to contact me if you would like to discuss how I can best assist you with your real estate goals. Sincerely, Allan Wulff