Appraisals
How a Home Appraisal Works
Understand what an appraiser evaluates—and how that differs from an inspection.
Three prices, three different jobs
The asking price is the seller’s starting point. The contract price is what the buyer and seller agree to. The appraised value is an independent professional opinion of market value as of a specific date. Those numbers can match, but agreement between two parties does not automatically establish the value a lender will accept. Before making an offer, understand which number supports your financing and which number reflects your negotiation.
What happens during the process
When an appraisal is required, the lender arranges the valuation under its procedures. The appraiser considers the property, relevant market information, and comparable sales. Depending on the assignment, the process may involve an interior visit, an exterior review, or another permitted approach. Ask your lender what valuation is being used rather than assuming every loan requires the same inspection of the property.
Why comparable homes matter
Comparable sales help explain what buyers have paid for similar properties. A nearby sale is not automatically a strong comparison: size, condition, location, age, layout, and other characteristics matter. In Hampton Roads, waterfront influence, flood exposure, lot characteristics, and differences between neighborhoods may deserve particular attention. A home across a city line or a larger renovated property may require substantial explanation before it becomes useful evidence.
Prepare information, not a target number
Sellers can organize an accurate improvement list, dates of major work, permits when available, and access instructions. Buyers can read the completed report and raise factual questions through their lender. Renovation receipts document spending; they do not promise an equal increase in market value. The goal is a complete and accurate record, without pressuring an appraiser to reach a desired result.
An appraisal is not your inspection
A valuation does not replace an independent assessment of the home’s systems and condition. Keep your inspection decision separate from your appraisal decision. Before closing, discuss the value conclusion, any lender conditions, and your available cash with your agent and lender. Understanding each professional’s role makes the next step much easier to evaluate.
General educational information, current as of publication. Loan requirements, property conditions, and contract rights vary. Confirm details with your lender, insurer, agent, or attorney as appropriate.