What to expect in the home appraisal process

Congratulations! Your home is under contract and the buyer’s lender has now ordered an appraisal of the property. Needless to say, the property will need to appraise for the sales contract amount in order for the loan to be approved by the lender. As a seller, it is important that you are aware of what the appraisal process entails and how to best be prepared.

Factors affecting the appraisal

The various factors affecting a home appraisal can be summarized as either external or internal factors. As a state-certified real estate appraiser, they will be using the Uniform Residential Appraisal Report as the basis for their evaluation.

Starting with external factors, the appraisal will make note of items such as:

  • zoning
  • other houses in the area
  • lot size
  • connected utilities
  • driveway
  • garage
  • underground sprinklers
  • storage shed or other structures on the property
  • a pool or tennis court, etc…

As for internal factors, the appraisal will make note of items such as:

  • square footage
  • number of bedrooms and bathrooms
  • type of construction and materials used
  • safety features: security system, smoke detectors, handrails on stairs, etc…
  • high-impact windows or storm protection
  • other amenities that may add value, such as a home automation system


As a seller, it is a best practice to prepare for a home appraisal the same way you would for a showing. The home should be clean and free of clutter, in order to show it in the best light. In addition, any minor repairs should be completed prior to the appraisal. If you have had any work done with regards to remodeling the home, it is a good idea to have any relevant paperwork handy to be able to produce.

Another important item to remember as a seller is that you do not get the full value of various updates reflected on an appraisal report. For example, you may have added a pool that costed you $60,000. An appraiser will need to account for the pool and thus add a value on the appraisal, but it will more than likely not equate to $60,000. The same applies to other upgrades throughout the home. In the end, if the home does not appraise for the contract sales price, the lender will not approve the loan. Although a second appraisal could be ordered if there were blatant mistakes made, typically this is not fruitful for the seller. If the property does not appraise for the contract sales price, then the buyer and seller will need to consult their real estate agents on the best approach to potentially reach an agreement. Otherwise, the seller will need to put the property back on the market in hopes of finding another buyer. Of course, any subsequent buyer obtaining a loan could potentially present the same challenge.

At Live South Florida Realty, Inc. we believe in taking the time to educate our clients on the full home buying or selling process. Thinking about selling your home in Palm Beach, Broward, or Dade counties? We can help! Contact us today!

By natasha@livesouthfl.com

REALTOR® with Live South Florida Realty, Inc.