Real Estate April 13, 2023


This is the term that you’re looking for when you want a value on your home. The appraisal report comes from an impartial 3rd party.

I just took an appraisal course for my broker’s license, & I do not envy the job of an appraiser nor do I pretend to fully understand all that goes into a complete appraisal. Please know that it goes well beyond looking up other recently-sold homes.

When a Realtor provides you with a pricing analysis of your home – this is NOT an appraisal. If you called me & say, “Hey, Katina… can you pop over to my house & give me an appraisal or an idea of what it’s worth?”  If you ask for an “appraisal” – that’s my trigger to explain some key differences:

  • Realtors & appraisers are 2 different people with 2 different jobs.
  • I provide a pricing analysis for free for my potential sellers. Appraisals are not free.

There are 3 basic reasons an appraisal would be ordered for a property:

1. The seller needs an official valuation of their property. They just may be curious, they may be settling a divorce or an estate, they may be using their home as some sort of collateral, they may be trying to figure out how much equity they have in the home to borrow against. A seller can order & pay for an appraisal whenever they would like, & it’s likely a few to several hundred dollars for an appraisal report.

  1. The buyer is getting a mortgage, & the lender wants to make sure that the home is worth at least what they are loaning on it. In this instance, the words “impartial 3rd party” are key. The buyer, even though they are paying for it, doesn’t have control over who the appraiser is. The seller doesn’t have control over picking the appraiser. Neither of the Realtors can weigh in on this decision. The bank or lender can’t pick them either. The lender orders the appraisal by some magical system that procures anonymity & random selection. The appraiser goes to the property & provides a report about 10 business days later with the valuation. If the appraised value meets or exceeds the agreed-upon sales price of that home – you’re good to go!
  2. A buyer can get an appraisal on a property even if they’re paying cash. They can include an appraisal contingency into their offer saying “Hey, I’m willing to pay $X cash for this home SO LONG AS an appraiser validates this value. The buyer then hires an appraiser to provide the report. Even though the buyer selects the appraiser, the appraiser is still acting as a neutral party to come up with an objective value.Sellers:
    Sometimes, sellers want to get an appraisal on their home before listing it to confirm their asking price. Please know that this appraisal is only good for your information at that very moment. The appraisal that the seller pays for will not be counted as the one the bank/lender takes into consideration when confirming the loan value.

    Even if you pay for an appraisal & the value comes in at $300,000, for example. Once you have a buyer, their lender is going to require their own separate appraisal that is geared for that buyer’s loan type. If that appraisal comes in at a value of $290,000… then there’s a $10,000 discrepancy on the value that needs to be ironed out. This is where an experienced Realtor can help explain your options & the best way forward.

    Just like many people confuse the words assessment & appraisal, just as many buyers confuse the goal of an appraisal with the goal of an inspection. Those are very different as well. There’s been more than one occasion when I’m writing up an offer for my buyers.

    I start to explain their inspection options, “You can get a home inspection which is about $400…” & the buyer interrupts me: “Oh, Katina – we don’t need an inspection… the bank will send out an appraiser.”

Big red flag! I halt everything & go into a deep dive of the difference. An appraiser may (Key word: MAY) flag some concerning structural items if these conditions affect the value of the home, but the goal of an appraiser is to come up with a VALUE, not CONDITION.

Assessment vs. Appraisal

I’m Always Here & Happy to Help!

Katina Hunter

Team Lead for the Katina Hunter Team with Coldwell Banker