Key Factors That Influence a Home Appraisal

A home appraisal plays a crucial role in the buying and selling process. It’s more than just a formality—an appraisal can make or break a deal. Understanding what affects an appraisal helps both buyers and sellers navigate the process with confidence.

💬 What Is a Home Appraisal?

A home appraisal is a professional estimate of a property’s market value, conducted by a licensed appraiser. The primary goal is to ensure the lender isn’t approving a loan that exceeds the home’s worth. It also protects buyers from overpaying.

🔍 Appraisal vs. Real Estate Valuation: What’s the Difference?

While both involve estimating a property’s value, an appraisal is a formal evaluation used by lenders during mortgage approval. In contrast, a real estate agent’s valuation helps determine listing price and isn’t used for financing decisions.

🏠 What Do Appraisers Evaluate?

Appraisers assess a range of factors to determine the value of a home, using both objective criteria and professional judgment. Here's what they look for:

📋 Property Condition and Features:

• Square footage and lot size

• Exterior appeal, including landscaping and grading

• Driveway and walkway condition

• Condition of the roof, foundation, and exterior materials

• Compliance with building codes

• Functionality and age of HVAC, plumbing, and electrical systems

• Number of bedrooms, bathrooms, and room layout

• Updates to kitchen and bathrooms

• Flooring type and condition

• Storage availability

• Energy-efficient or smart-home upgrades

• General upkeep and cleanliness

🏘️ Comparable Sales:

Recent sales of similar homes in the area (usually within the past 6 months) are used to help determine the appraised value, with adjustments made for any market shifts or home differences.

📍 Neighborhood and Location:

• School district quality

• Proximity to public transport and amenities

• Crime rates and safety

• Upcoming developments or infrastructure improvements

📝 The Appraisal Process Explained

Once an offer is accepted, the lender typically orders the appraisal. The appraiser inspects the home, reviews local market data, and compiles a report outlining their assessment. This process usually takes a few days.

⬇️ What Can Lower a Home’s Appraisal?

Some factors—especially those outside the seller’s control—can lead to a lower valuation:

• Weak comparable sales in the area

• Sluggish or volatile housing markets

• Poor neighborhood ratings, declining demand, or limited amenities

• Unresolved maintenance issues

• Dated layouts or features that don’t meet buyer expectations

⬆️ What Boosts Appraisal Value?

A strong appraisal usually results from a mix of positive market trends and a well-maintained, updated home in a desirable location. Factors that help:

• Strong local sales data

• Updated kitchen and bathrooms

• Popular layouts with functional living space

• Curb appeal and energy-efficient upgrades

• Great school district and nearby amenities

• A competitive, high-demand housing market

⚠️ What If the Appraisal Comes In Low?

A low appraisal can delay—or even derail—a transaction. If the appraised value is below the agreed price:

• Buyers can renegotiate with the seller

• Pay the difference in cash

• Use the appraisal contingency to walk away without penalty

🛠️ Can You Challenge a Low Appraisal?

Yes. Buyers and sellers can dispute an appraisal by presenting better comparable sales or overlooked property features. Ordering a second appraisal is also an option—though lenders aren’t required to accept it.

📆 How Long Is an Appraisal Valid?

Most home appraisals are valid for about four months. However, timelines can vary based on the lender or loan type. New appraisals might be required if:

• The market shifts dramatically

• Significant changes are made to the property

• The lender’s policies change

Understanding the factors that affect home appraisals helps you better prepare—whether you’re buying, selling, or refinancing. A professional appraisal ensures that everyone—buyer, seller, and lender—is making a smart, informed decision.