What Is a Home Appraisal? (And What Happens If It Comes in Low?)
You found the house, your offer was accepted, and you're already imagining where the couch is going to go.
Then someone mentions the appraisal.
Cue the panic.
The good news? An appraisal is a normal part of the home buying process, and in most transactions, it comes back without any major surprises.
Let's talk about what it is, why it matters, and what happens if it doesn't go as planned.
What is a home appraisal?
A home appraisal is an unbiased opinion of a property's market value completed by a licensed appraiser.
If you're getting a mortgage, your lender will almost always require one. The lender wants to make sure the home is worth what you're paying before they loan hundreds of thousands of dollars.
Fair enough.
Who pays for the appraisal?
In most Oregon and Washington transactions, the buyer pays for the appraisal as part of their loan expenses.
Your lender orders the appraisal, not your Realtor and not the seller.
That means no one gets to pick the appraiser based on who they think will hand out the highest value.
What does the appraiser look at?
The appraiser evaluates several factors, including:
The home's size and layout
Overall condition
Recent comparable sales
Location
Upgrades and renovations
Lot size and features
Current market conditions
They're looking at facts and data to determine what the home is worth in today's market.
Does the appraisal have to match the purchase price?
Not necessarily.
Sometimes the appraised value comes in right at the purchase price.
Sometimes it's higher.
And sometimes it comes in lower than everyone hoped.
Before you start packing up your dreams and canceling the moving truck, know that a low appraisal doesn't automatically mean the deal is over.
What happens if the appraisal comes in low?
There are several possible solutions, depending on the situation.
The buyer and seller may renegotiate the purchase price.
The buyer may choose to bring additional cash to closing to make up the difference.
The seller may decide to lower the price.
In some cases, there may be grounds to challenge the appraisal if important comparable sales or information were overlooked.
Every situation is different, and that's why having an experienced Realtor matters.
Can the appraisal come in higher than the purchase price?
Yes.
If it does, great.
It doesn't mean the seller suddenly gets to charge you more.
It simply means you're purchasing the home for less than or equal to what the appraiser believes it's worth.
Those are the kinds of surprises we like.
Does a low appraisal mean I shouldn't buy the home?
Not always.
An appraisal is one professional opinion based on available market data.
There are times when buyers choose to move forward because they love the home and understand the long-term value.
Other times, renegotiating the price is the smartest move.
The right decision depends on your goals, your finances, and the specifics of the transaction.
My advice
Appraisals can feel stressful because they're one more step between you and getting the keys.
The important thing to remember is that they're a normal part of the process, and a low appraisal isn't the end of the story.
My job is to help you understand your options, negotiate when needed, and keep the transaction moving forward. Whether the appraisal comes in exactly where we hoped or throws us a curveball, we'll have a plan.
Because buying a home comes with enough unexpected moments.
The appraisal doesn't have to be one of the scary ones.
