First Time Home Seller: The Low-Down On The Appraisal Process

/ /
Appraisals can turn a real estate transaction upside down. They are arguably the biggest risk for sellers, especially in a fast-moving market. Sellers should understand the risks of the appraisal when their home falls under contract.

Congratulations, you just got your home in contract for $100,000 over the asking price. In fact, your home is the most expensive home to sell in your neighborhood all year. All the prep work you put into your home coupled with the marketing and market know-how of  Team Diva paid off. All you need to do now is move out and wait for the check to roll in right?

Not quite so fast. Selling your home for top dollar does have some risks, and one of the biggest is the Appraisal.

What Is The Appraisal?

Home appraisal is above all a matter of numbers, but it’s about more than just determining a price. The buyer’s lender wants to make sure they are not lending on an inflated sale price. To ensure this, the lender contracts an appraiser to evaluate the fair market value of the property. The appraiser is also making sure that the home is safe and habitable for the buyer.

If the appraiser does not value the home at the same amount agreed between seller and buyer, the lender will not finance the full sale price. In addition, if there are safety issues called out by the appraiser, they may not lend on the property until those are resolved.

Many buyers are asked to waive their appraisals, but not all can make that work financially. In a hot market, however, they might try to waive it to be more competitive. Read our blog on appraisal contingency for home buyers to get the other side’s viewpoint:

Appraisal Contingency: Should You Waive It?

First Time Home Sellers: Understanding The Market Before Appraisal

Review offers for appraisal contingency

When Team Diva does a market analysis for your home, we dig deep to understand the demand for your home. Before we list your home, we look at what comparable properties are indicating for initial price versus the final price.

Demand rate looks at the probability of multiple offers. For instance….

  • 2.0 = Two Homes for Every Buyer on the Market = Extreme Buyers Market (Similar to the Recession)
  • 1.0 = One Home for Every Buyer on the Market = Equal Market. Your home will sell but it is a low probability of it selling in multiple offers.
  • 0.5 = Half of a Home for Every Buyer on the Market = Extreme Sellers Market

The Other Part is Comparables (Like Type of Homes in Your Neighborhood or Building)

Part of figuring out if your home is going to exceed the sale price of comparable properties in the neighborhood is looking at the surrounding homes and then adjusting for the demand. The comparables are what the appraiser is going to use to give your home its value.

It’s important to have this information so that you are prepared to know what to look for when the offers start rolling in. Extremely high offers are likely to have an appraisal issue UNLESS you have a bunch of other similar offers or can show that the going rate in the neighborhood is 15% above asking.

First Time Home Seller – Accepting the Best Offer

Present to Perfection for appraisal

The highest offer is not necessarily the best offer. In a fast-moving market where prices are rising, a good offer will have language to address a low appraisal. There are several different means a buyer can address low appraisal in their offer. They can contribute a limited amount of extra cash in the event of a low appraisal or they can waive their appraisal contingency altogether.

Here is a sample of conversations happening in this hot market to help buyers think through appraisal issues:

Winning a Multiple Offer – Waive Appraisal, Win Like a Pro!

If they waive the entire appraisal, they have to make up the entire shortfall between the appraised price and the purchase price. Team Diva will help you evaluate offers to minimize the risk of you having to accept a lower final sale price. We also evaluate the lender. Big lenders use a pool of appraisers.

Picking a Good Lender is also key. As we evaluate offers we will advise against big institutions for the lender. Bigger companies typically pull their appraisers from far-reaching areas like Duvall. What do they know of a co-op on Queen Anne?

How To Prepare For Appraisal

The best thing you can do to prepare for the appraisal is to continue to present the home in the best possible way. Keep the home looking like it is still on the market while under contract. Don’t remove the staging until the appraiser has completed the report. Keep the grounds well maintained. Make sure all major systems such as heating, siding, and the roof are in good working order. Safety straps on the water heater are a must, and legally the home is required to have smoke alarms and carbon monoxide detectors on each floor.

Here are the Steps to Manage the Appraisal Process

Step One: Team Diva creates a packet for the appraiser showing all of the data we have collected in the market, a copy of the offer, a spreadsheet of all of the offers, comparable properties, and other pertinent information.

Step Two: Take the dang key-box off the listing. Why let an appraiser just waltz on in without any notice? We need time to love them up.

Step Three: The seller meeting the appraiser is the best option if possible. Appraisers are more kind to homeowners than us pesky real estate brokers. But if that is not possible we will meet them at the property UNLESS they put up a fuss. If they put up a fuss, we will email them the packet.

Step Four: Have a calming libation and know that everyone did their best in this situation.

Step Five: In the case that the appraisal does come back low, fight like hell to either change the lender or review the comps the appraiser used for your home. Team Diva has seen appraisers review the incorrect house, have the wrong purchase price, and other weird things.

As your agents, Team Diva works hard to make sure you are getting the maximum amount of cash for your home. During the transaction period, we continue to monitor the market for closed sales. We print the latest comps and put together a packet for the appraiser. Depending on the vibe we get from the appraiser, we will meet them at the home or have you meet them with the comparable packet.

Some appraisers don’t want to deal with agents, but they don’t mind chatting with homeowners. We may ask you to meet the appraiser at the house instead of us. The appraiser’s bad side is not where we want to be, so we don’t ruffle their feathers.


Have a better grasp of the appraisal process? Great! Let’s keep learning.

The appraisal process can be the most nail-biting part of a transaction for sellers. As long as you are prepared for all the possibilities, you will be able to make the best decisions to maximize your sale. Get an experienced team like Team Diva who knows how to navigate this process from start to finish.

Is it time for you to contact a Diva and get a free personalized market analysis? 

Go ahead and email us at thediva@teamdivarealestate.com or by calling/texting 206-271-0264.

2 thoughts on “First Time Home Seller: The Low-Down On The Appraisal Process


  1. Hi…
    Great! You have nicely explained about the Appraisal.One should understand The Home Appraisal Process clearly.Many home buyers always get confused about the Appraisal process.A person must know that In most residential property transactions you can choose your real estate agent but you can not choose your appraiser.However your lender will choose your appraiser.


Comments are closed.

Message Us

Want to chat about something you see or just need an incredibly gifted Seattle real estate team? Send us a quick message!