What Homeowners Need to Know About Home Appraisals

Whether you are planning to sell your home or refinance, getting your home appraised is an important part of the process. With an understanding of what an appraiser will look for, how you can prepare, and what to expect during and after the appraisal, you can feel confident about navigating the appraisal process.

An appraisal is an opinion of the market value of your home, and it’s performed by a third-party professional with state-issued appraiser credentials. The main purpose of an appraisal is to help the lender evaluate the collateral for a loan, which is your home.

If you’re selling your home, the homebuyer's lender is responsible for ordering the appraisal, and the homebuyer will likely be required to reimburse the lender for the cost.

If you’re refinancing your home, your lender is responsible for ordering the appraisal, and you will likely be required to reimburse the lender for the cost, typically as part of your closing costs.

How to Prepare for an Appraisal

Here are some things you can do to prepare your home before the appraiser’s visit:

• Make minor repairs. Issues such as leaky faucets, flickering light bulbs and unsecure stair railings can all decrease the overall condition rating of your home and lower the valuation. Take some time to fix these minor details before the appraisal.
• Freshen up paint. This is a simple way to make your home feel more updated.
• Clear up clutter. Tidying up around the house will make your home look more presentable. It also ensures that every area is visible and accessible for the appraiser.

What Appraisers Look For

To determine the market value of your home, the appraisal considers multiple factors that are outside of your control, including the home’s location and the total lot size, as well as comparable properties within the area and market conditions.  

Other aspects the appraiser will look at to assess your home’s value are based on what they see during an on-site home inspection. Many of these factors are within your control. Here’s an example of what appraisers typically look at during a home appraisal visit:

General Property

• Size: The square feet of the structure’s living area above ground and the number of rooms, bedrooms and bathrooms.
• Garage and driveway: The number of cars the garage can house, whether it’s attached or detached, and the driveway surface type.
• Accessory dwelling unit (ADU): Whether zoning allows the ADU and how the ADU impacts the marketability or value of the property.
• General qualitative assessment: The overall condition of the property and whether the home conforms with the standards of the neighborhood.

Interior

• Heating and cooling: The type of system and its condition.
• Floors, walls and trim: The material and their condition.
• Appliances: The presence of appliances, such as a refrigerator, range, oven and dishwasher.
• Energy-efficient features: Examples of these features include an energy efficiency certification, energy-efficient windows, tankless water heaters and solar panels.

Exterior

• Exterior walls: The material and their condition.
• Roof: The type, material and condition.
• Outdoor amenities: This could include a porch, deck, patio, pool, outdoor fireplace or other amenities.

Foundation and Attic

• Foundation: The type and condition.
• Basement and attic: Whether they’re finished or unfinished.

What to Do During the Appraisal Visit

Consider giving the appraiser a one-page bulleted list of the improvements you’ve made to your home, along with the dates you completed them. This will help the appraiser keep an eye out for these items when inspecting the property. 

Here are some other tips to help the appraisal visit go smoothly:

• Be there during the appraisal visit. There's a rule against pressuring or threatening an appraiser to get a certain home value, but you can be present during the appraisal to answer questions. 
• Point out hidden features. Appraisers may overlook these at first glance. Politely point them out since they may benefit your valuation.
• Never hover over the appraiser. Let them see the home at their own pace.
• Make the visit distraction-free. Make the appraiser’s job easy by minimizing distractions and background noise. If you have pets, consider keeping them outdoors or in the garage while the appraisal takes place. This will ensure the appraiser is not in a rush and has plenty of room to work.

What to Expect After the Appraisal Visit

After the appraisal visit, the appraiser will analyze information from the visit and develop the value opinion. About one to two weeks after the property inspection — or possibly longer in areas with high appraisal activity — the appraiser will provide a report to the lender that shares this analysis and the home valuation.

If you’re refinancing, in most cases, the lender is required to provide a copy of the report to you.

If you’re selling your home, you typically won’t receive a copy of the appraisal report, but you can ask the homebuyer to share it. The homebuyer may be reluctant to share it with you, however, especially if the home is appraised for more than your sales price. Conversely, if the home is appraised below your sales price, the homebuyer will likely share the report and try to negotiate a lower sales price.

If you have questions about the results of the appraisal process, or think there are errors in the appraisal report, talk to the lender. Appraisers cannot discuss the results of the appraisal process with anyone other than the lender.

To learn more about the selling process, including what to do if your home is appraised below your sales price, visit My Home by Freddie Mac^®.