BUYER'S GUIDE SERIES: The Appraisal

When buying a home, you and the seller agree on a purchase price based on what you both believe is fair market value—essentially, what a ready, willing, and able buyer is prepared to pay and what a seller is willing to accept. But before your lender hands over a large sum of money, they need assurance that the home is truly worth the agreed price. This is where the appraisal comes in.

What is a home appraisal?
An appraisal is an independent assessment of a property's value, conducted by a licensed professional. Mortgage lenders require it to confirm that the home’s price aligns with current market conditions and comparable home sales. It's a key part of the mortgage approval process and helps protect both you and the lender from overpaying.

What happens if the appraisal comes in low?
While most appraisals go smoothly, there are times when issues arise—particularly if there aren’t enough comparable sales in the area or the appraiser makes questionable judgments. A low appraisal means the lender may not approve the full loan amount you expected.

But don’t panic. If the appraiser raises valid concerns, we can negotiate with the seller to lower the price. If we believe the appraisal is flawed, we can contest it or even request a second one. Sometimes, a middle ground is reached where both buyer and seller adjust expectations.

Pro tip: This is where having an experienced real estate agent skilled in negotiation is essential. We'll guide you through your options and advocate on your behalf.

**One last thing—**don’t be surprised if the appraisal matches the exact purchase price. Appraisers often aim to justify the sale, not reinvent it.