The Appraiser Is Coming. What Should a Seller Expect?
If your buyer is financing the purchase, the lender may order an appraisal before completing the loan.
Your job is not to convince the appraiser what your home is worth.
Make the property accessible. Make useful property information available. Then let the appraiser do the appraisal independently.
What Is Happening at This Milestone?
The Lender Orders the Appraisal
The appraisal provides an independent opinion of value for the lender's collateral decision.
Your Job
Make the property reasonably accessible, secure pets and provide accurate information about significant improvements or features when useful.
My Job
Make useful property facts and relevant market evidence available when appropriate without trying to pressure the appraiser toward a particular value.
What Should You Do Before the Appraiser Arrives?
Make the house easy to access and easy to understand.
You do not need to stage the home again or start making random improvements.
Make sure the appraiser can get into the home, garage and other relevant areas. Secure pets. Gather useful information about meaningful improvements, permits or property features that may not be obvious during a short visit.
An Appraisal Is Not Another Home Inspection
Home Inspection
A home inspection looks more broadly at accessible systems and components and reports observed property conditions to the buyer.
Appraisal
The appraiser develops an independent opinion of value for the appraisal assignment.
Property condition can matter, but the appraisal is not the buyer's general home inspection.
The Appraiser Is Looking at More Than the Contract Price
The contract price matters because a real buyer and seller agreed to it.
But the appraiser still develops an independent opinion of value.
The Property
Size, room count, design, lot, condition, features, improvements and other relevant characteristics.
Comparable Sales
Relevant closed sales help show how the subject property fits the market.
Location
Neighborhood, waterfront relationship, golf-course position, major roads, lot characteristics and other location differences can affect the comparison.
Before the Appraisal Appointment
Make Access Easy
- Make sure the appraiser can enter the home.
- Provide access to the garage.
- Unlock gates when needed.
- Make detached structures accessible when they are part of the property.
- Make sure important areas are not blocked by storage.
- Secure or remove pets.
Gather Useful Property Information
- Roof replacement information.
- HVAC replacement information.
- Major electrical or plumbing updates.
- Permitted additions or renovations.
- Significant kitchen or bathroom renovations.
- Pool, dock or major exterior improvements when applicable.
- Relevant permits, invoices or warranties already available.
Tell the Appraiser What Changed. Do Not Tell the Appraiser What It Is Worth.
Some improvements are obvious. Others are not.
A newer roof may not look dramatically different from the ground. Electrical work can be hidden behind walls. Plumbing replacement, hurricane protection, permits and major mechanical work may not be obvious during a short property visit.
Cost and value are not the same thing.
Spending $30,000 on an improvement does not automatically add $30,000 to the appraised value.
Give the appraiser accurate facts about what was completed. Let the appraiser determine what effect those improvements have on value.
Useful Information, Not a Sales Pitch
I want the appraiser to have accurate information that can help explain the property and the local comparison.
- Accurate property facts.
- Documented significant improvements.
- Relevant permit or replacement information.
- Information about the property's neighborhood or position.
- Relevant closed sales or market evidence when appropriate.
- Features that may not be obvious during the property visit.
The appraiser remains independent.
I do not tell an appraiser, “We need this number.”
I can provide accurate information and relevant evidence. The appraiser independently decides which information and comparable sales are appropriate.
Nearby Does Not Always Mean Comparable
Two homes can be close together and still compete for different buyers.
Niceville
Neighborhood, subdivision, lot, condition, new-construction competition, Bluewater Bay and other location differences can affect the comparison.
Shalimar
Waterfront relationship, golf-course position, neighborhood, property age, lot and condition can create meaningful differences between nearby homes.
Fort Walton Beach
Neighborhood, water influence, property age, renovation, Elliott Point, Kenwood and other location differences can affect which sales belong in the comparison.
Should the Seller Stay Home During the Appraisal?
You usually do not need to follow the appraiser through the house.
When practical, give the appraiser room to work.
If you need to remain home, make sure access is available and avoid giving a running sales presentation.
Make a Safe Plan for Pets
Taking pets with you is the easiest option when practical.
The appraiser may need to move through the house, garage, yard and other parts of the property.
Do not make the appraiser responsible for the pet.
If an animal must remain at the property, make sure there is a safe plan that still allows reasonable property access.
Do Not Start Random Repairs Because the Appraiser Is Coming
By this point, you may already have completed or agreed to inspection repairs.
Complete work you agreed to complete.
But the appraisal appointment is not a reason to start replacing old systems or making cosmetic improvements at the last minute.
VA and FHA Appraisals Can Include Property Requirements Too
VA and FHA buyers are common enough in Niceville, Shalimar and Fort Walton Beach that sellers should understand this difference.
These appraisals address value, but the applicable loan program also has property requirements that can affect whether the buyer's financing can move forward.
VA Appraisal
A VA-approved appraiser develops an opinion of value and reviews the property in relation to VA Minimum Property Requirements.
The VA appraisal is not a substitute for the buyer's independent home inspection.
If the property does not meet an applicable VA requirement, the issue may need to be resolved before the loan can close.
FHA Appraisal
An FHA appraisal addresses value and includes observation and reporting related to HUD's applicable property acceptability requirements.
If the property does not meet an applicable requirement, repair, correction or further evaluation may be needed before the financing can proceed.
Do not repair from a rumor.
Accepting a VA or FHA buyer does not mean the house suddenly has to be perfect.
If the appraisal identifies a property condition that affects the loan, get the actual requirement first.
Then determine what needs to be corrected, what it should cost and what the contract says.
What Is VA Tidewater?
VA uses a process commonly called Tidewater when it appears the appraisal may come in below the contract price.
Before the appraisal is completed, additional relevant sales data may be submitted through the VA process for the appraiser to consider.
Tidewater is not permission to pressure the appraiser.
It is an opportunity to make sure relevant market evidence is available before the appraisal value is finalized.
It does not guarantee a different value.
What Can Happen Next?
The Value Supports the Transaction
The lender can continue toward final loan approval, assuming the buyer satisfies the remaining loan conditions.
More Information or Work Is Needed
The lender or appraiser may need clarification, documentation, repair or another property visit depending on the appraisal and loan program.
The Value Is Below the Contract Price
Do not automatically reduce the price. Read the contract and identify the buyer's actual financing problem before deciding what to do.
A Low Appraisal Does Not Automatically Rewrite the Contract
Slow the decision down.
First confirm the appraisal result and read the signed contract.
Then identify the buyer's actual financing problem and review the appraisal for factual errors, missing property information or relevant market evidence.
Finally, put the seller's choices into dollars.
The Appraisal Is Not the Time to Start Selling the House Again
We already had the market conversation before you listed.
A buyer saw the property, decided it was worth pursuing and signed a contract.
At appraisal, my job is not to pressure the appraiser into agreeing with us.
My job is to make sure useful facts are not missing.
Questions worth asking
Was the roof replaced?
Was a major renovation permitted?
Is there a neighborhood or location difference that matters?
Are there relevant closed sales that help explain the contract price?
Is a property feature easy to miss during a short visit?
Give the appraiser facts. Let the appraiser appraise.
Next Seller Milestone: Closing Day
If the appraisal, financing, title work and remaining contract requirements come together, the transaction moves toward closing.
Now the questions change again.
When do you move out? What happens at the final walk-through? When does the buyer get the keys? When do you get your money?
You Are Here: Appraisal
Selling becomes easier to understand when you know what is happening now and what comes next.
Appraisal
Previous Milestone: Repair Request
Separate what the buyer requested from what the contract requires and what makes financial sense.
Repair Request →Next Milestone: Closing Day
Final walk-through, signing, possession, keys and seller proceeds.
Closing Day →Questions Sellers Ask Before the Appraiser Comes
Do I need to clean the house for the appraisal?
You do not need to prepare the home as though photography is happening again. Keep the property reasonably clean and accessible so the appraiser can see the relevant areas and features.
Should I be home during the appraisal?
You usually do not need to follow the appraiser through the house. When practical, give the appraiser room to work and make sure reasonable access is available.
Should I give the appraiser a list of improvements?
Useful information about significant improvements can help explain changes that may not be obvious. Include accurate facts about what was completed and when. Do not assume improvement cost equals added market value.
Can my listing broker give the appraiser comparable sales?
Relevant market information may be provided when appropriate, but the appraiser remains responsible for choosing comparable sales and independently developing the opinion of value.
Are VA and FHA appraisals different?
VA and FHA financing includes program-specific property requirements in addition to valuation. If the appraisal identifies a condition affecting those requirements, correction or further evaluation may be needed before the financing proceeds.
Is a VA appraisal the same as a home inspection?
No. A VA appraisal addresses value and VA property requirements. It is not a substitute for the buyer's independent home inspection.
What is VA Tidewater?
Tidewater is the VA process used when it appears the appraisal may come in below the contract price. Additional relevant sales data may be submitted for the appraiser to consider before completing the appraisal.
Does the seller have to lower the price if the appraisal is low?
Not automatically. The signed contract, financing provisions, appraisal protections and buyer resources determine the available choices.
Can an appraisal be reconsidered?
Depending on the loan and lender process, a reconsideration or appraisal review may be available when there are relevant factual errors, missing property information or other supportable concerns. A change in value is not guaranteed.
Go Deeper Where You Need To
Low Appraisal
What can the seller do if the appraised value is below the contract price?
Low Appraisal Seller Guide →Home Value Analysis
See how relevant sales, competition and property differences are evaluated before listing.
Home Value Analysis →Give the Appraiser Facts. Let the Appraiser Appraise.
Make the property accessible.
Provide useful information about meaningful improvements and property features.
Do not try to pressure the appraiser into a number.
If value or a loan-program requirement becomes a problem, we identify the actual issue, read the contract and put your choices into dollars.
Sources and Important Notes
Appraisers must remain independent in developing their opinion of value. Relevant property facts and market evidence can be provided, but the appraiser is responsible for the appraisal analysis and comparable-sale selection.
VA appraisals address value and applicable VA Minimum Property Requirements. VA states that its appraisal is not the same as a home inspection.
FHA appraisal requirements are governed by HUD's current Single Family Housing Policy Handbook 4000.1, including applicable property acceptability requirements.
A low appraisal does not automatically change the purchase price. The executed contract, financing provisions, appraisal protections and later agreements determine the parties' choices.
This page provides general real estate information. It is not appraisal, legal, lending, engineering, inspection or insurance advice.
Jim Whatley, Broker/Owner • Uber Realty LLC • 850-499-2940 • jim@uberrealty.com
Florida Broker License BK3174026 • Florida Brokerage License CQ1038333 • Equal Housing Opportunity