The Seattle Home Appraisal Process for Sellers: 27 Questions Every Homeowner Should Ask

The Seattle home appraisal process for sellers can be super confusing. Luckily for you I have been listing and selling Mid-Century Modern and unique luxury homes in the Seattle market for over 25 years. I have seen crazy low appraisals, appraisers who discriminate against homeowners of color, and have personally experienced a wide variety of appraisals on my own home in Seward Park. I am going to do my best to help you prepare for the home appraisal process like a true champ of the Seattle real estate market.

The Seattle home appraisal process for sellers is an extremely important part of the home selling process. I STRONGLY urge you to download our Seattle Seller Guide that goes into depth about the Seattle home selling process.

But before we start let me tell you about my own personal experience of dealing with appraisers on our home in Seward Park.

My Own Seattle Home Appraisal Process For Sellers

I have had four appraisals on my home in Seward Park in the 20 years I have owned the home. In one year we happened to have two appraisals. Two different times people came to our house in a span of six weeks. There was a $150,000 difference in value between the two appraisals. WTF!!!

The first appraisal came out higher and I was there, with comparables, a list of improvements, and I chatted up the appraiser. Unfortunately, I was unable to be at the home the second time the house was appraised. And the appraisal was $150,000 less than the first one! Ugh!

Same house! But the only difference was I wasn’t able to physically give detail to the appraiser.

Hence I want to make sure you all benefit from this experience and I want to be able to answer as many questions as possible.

27 Questions Every Homeowner Should Ask About the Home Appraisal Process in Seattle

Below are answers to 27 questions that home sellers have about the Seattle home appraisal process.

What is a home appraisal?
Why does the buyer need an appraisal?
When does the appraisal happen in the transaction timeline?
How long does the appraisal process usually take?
Who orders the appraisal—the buyer, lender, or agent?
Do I need to be present for the appraisal?
How does the appraiser determine my home’s value?
How do appraisers mess up the value of a home in Seattle?
What comparable sales (comps) will an appraiser use to determine the value of my Seattle home, and how recent are they?
Will multiple offers or a bidding war affect the appraised value?
Does the appraiser consider the contract price?
How much weight do upgrades or renovations carry for a home appraisal?
Should I make repairs or improvements before the appraisal?
Does cleanliness or staging impact the appraisal value?
What information should I provide the appraiser (upgrades list, permits, etc.)?
Should I leave during the appraisal appointment?
What happens if the appraisal comes in lower than the sale price?
Can a low appraisal kill the deal?
Can the appraisal be challenged or appealed?
How often do appraisals come in low in this market?
What role does the appraisal contingency play?
What are my options as a seller if the appraisal comes in low?
Can I see a copy of the appraisal report?
Does a low appraisal affect future buyers if this deal falls through?
Can my agent communicate with the appraiser?
How are appraisers selected, and are they local?
What happens if the appraiser makes a mistake?

Before we even start, let’s answer a basic question.

What Is A Home Appraisal?

A home appraisal is the official process of a licensed home appraiser determining the value of a home based upon comparable properties, size, condition, location, and other factors about a home.

Now – Let’s get the rest of those questions answered!

The Purpose and Timing of a Home Appraisal in Seattle

Let’s start out answering your Seattle home appraisal process for seller questions about the purpose and timing of a home appraisal.

Why does the buyer need an appraisal?

The buyer’s lender requires an appraisal as part of the home lending process. A buyer who is buying with cash can also negotiate the sale price of the home based on the appraised value of that home.

When does the appraisal happen in the transaction timeline?

The home appraisal typically happens once the inspection has been satisfied between the buyer and the seller. The appraisal usually happens in the second or third week while the home is under contract.

How long does the appraisal process usually take?

The appraisal takes about 1 to 3 hours depending on the size of the property. For instance, a home appraisal on a larger five acre luxury property will take much longer than an appraisal of a condo in a large building.

Who orders the appraisal—the buyer, lender, or agent?

The lender orders the appraisal in the case the home buyer is getting a home loan. A homeowner can also order an appraisal if they want to independently determine the value of the home.

Do I need to be present for the appraisal?

You do not need to be present for the appraisal but I strongly recommend that you be prepared for the appraisal. I have personally seen appraisals change if you and/or your listing agent are present during the appraisal.

Methodology To Determine The Value Of A Home During Appraisal Process In Seattle

Over the years the following questions have been asked by my Seattle sellers about the home appraisal process on how one determines the value and the methodology used by appraisers.

How does the appraiser determine my home’s value?

Appraiser can use one of three of the following process to determine the value of your home:

Sales Comparison Approach: Value is determined on recent sales of a similar sized home, with a similar style, and similar age of a home in your EXACT neighborhood. The appraiser can also increase or decrease the value based upon size, condition, upgrades, lot size, and location.
Cost Approach: The value of the home is determined on the cost to build the home on this specific lot. Basically, how much would it cost to build from scratch this particular property. The cost approach is typically used on new construction homes.
Income Approach: The value of the property is determined based on the income that property produces through rents or other income producing activities. Multi-family homes are often evaluated by appraisers using an Income Approach.

How Do Appraisers Mess Up The Value Of A Home In Seattle?

Many appraisers do not know how to accurately determine the boundaries of a Seattle neighborhood. Instead appraisers use the “One Mile From Target Home” as a standard to determine the value. Seattle is a network of smaller neighborhoods with a diverse housing stock. In one mile you can be in three different neighborhoods with different values of that home. Appraisers who are familiar with Settle’s neighborhood boundaries are more than likely to do a better job determining the actual value of your Seattle home during the appraisal process.

Pro-Tips To Help An Appraiser Determine The Value Of Your Seattle Home

Have a map of your specific neighborhood.
Create a list of all of the improvements you have made to your home and the amount you spent on those improvements.
Make sure you and/or your real estate professional pulls a list of comparables for your home.
Go through and make sure your home is tidy and show ready.
Appraisers are notoriously biased. Remove any and all photos of you and your family that might trigger an appraiser’s racial bias.
Install a CO2 detector on every floor.
Make sure your hot water heater has earthquake strapping.

What comparable sales (comps) will an appraiser use to determine the value of my Seattle home, and how recent are they?

Appraisers use similar homes that were recently sold. Similar homes need to be the same size, age, and condition of the target home to determine the overall value. The appraiser will also adjust the value of your Seattle home based upon size, condition, upgrades, lot size, and location during the appraisal process.

An appraiser should be using comparable sales from the last 3-6 months. But if the property is super unique the appraiser can use sales that are older.

Will multiple offers or a bidding war affect the appraised value?

Yes – an appraiser will and should take into account the value of the home based upon the number of offers that were made on that property. An appraiser will use “Market Condition Adjustments” if a market is going up. They will also use this same adjustment if the market is going down.

Pro-Tips To Help An Appraiser Value Your Home In A Multiple Offer

Provide a printed copy of your contract with the escalator form to the appraiser.
Make sure your real estate professional has a spreadsheet of all of the other offers so they know of the interest that was in your home.
Have a map of your specific neighborhood.
Create a list of all of the improvements you have made to your home and the amount you spent on those improvements.
Make sure you and/or your real estate professional pulls a list of comparables for your home.
Go through and make sure your home is tidy and show ready.
Appraisers are notoriously biased. Remove any and all photos of you and your family that might trigger an appraiser’s racial bias.
Install a CO2 detector on every floor.
Make sure your hot water heater has earthquake strapping.

Does the appraiser consider the contract price?

Yes the appraiser does take into consideration the agreed upon contract price set by the buyer and the seller. A home’s ultimate value is determined by what a buyer is willing to pay for a home. However, the contract price is not the only factor that the appraiser uses to determine the value of your Seattle home.

How much weight do upgrades or renovations carry?

Improvements and renovations of your home increase the overall value that a buyer is willing to pay for your home hence it increases the value of that home for the appraiser. There is no specific percentage increase an appraiser will give a home if that home has an updated kitchen or bathroom. However, you can use the following guidelines to help you determine what improvements to make in your home:

Cosmetic aka Diva Difference: 5-10% increase in value
Kitchen Update: Value is increased 60-80% of the overall cost of the renovation.
Bathroom Remodel: Value is increased 50-75% of the overall cost of the renovation.
Adding Square Footage To the Home: Value is increased 70-90% of the overall cost of the renovation.
Systems (Roof, windows, etc…): Value is increased 0-30% of the overall cost of the renovation.

I wrote an excellent blog a couple of years ago about what updates you should do to add value to your home.

Preparing Your Seattle Home For The Appraisal Process

Should I make repairs or improvements before the appraisal?

Absolutely! Your home needs to be up to code BEFORE the appraiser comes to your home in Seattle. Here is a quick list of things you should do before the appraiser comes to your home.

Install a CO2 detector on each floor.
Ensure that the seismic straps are installed on the hot water heater.
Make sure that all of the lights are on.
The appraiser will need easy access to HVAC systems, hot water heaters, etc…

Does cleanliness or staging impact the appraisal value?

Yes – cleanliness and staging does impact the overall appraised value of the property. Team Diva does not have the staging removed from the home until after the lender’s appraisal because we know that the staging improves the overall look of the home.

Remember when I said we had a lower appraisal? The biggest difference is that we had a house sitter at our home during the appraisal who we know is not the most tidy person.

What information should I provide the appraiser (upgrades list, permits, etc.)?

Here is a list of items that we have provided to appraisers over my 25+ years of working Seattle’s real estate market:

Copy of the contract.
Include the escalator form in the copy of the contract if the home sold in multiple offers.
Make sure your real estate professional has a spreadsheet of all of the other offers so they know of the interest that was in your home.
Have a map of your specific neighborhood.
Create a list of all of the improvements you have made to your home and the amount you spent on those improvements.
Have a copy of the permits if you did a major remodel.
Make sure you and/or your real estate professional pulls a list of comparables for your home in your neighborhood..

Should I leave during the appraisal appointment?

I believe it is best if you and/or your real estate agent are present during the appraisal. It is so important that the appraiser has a good rapport with you and the home. Some appraisers are jerks and will just ignore you. But you should be present to provide them with the list of items they need to help determine the value of the home.

Potential Problems That Seattle Home Sellers Might Experience With An Appraisal

What happens if the appraisal comes in lower than the sale price?

The buyer and seller have the following options to handle an appraisal in Seattle that comes in lower than the sales price.

1st Option: Buyer and seller agree to reduce the price to the new appraised value.
2nd Option: Buyer agrees to come up with the additional cash to cover the lower appraised value. This is more typical in a multiple offer situation
3rd Option: The buyer can get out of the contract if the seller does not want to lower the price to the new appraised price when they have an appraisal contingency.

There are also a couple of other options if the above three do not work. The buyer can change lenders and start the entire process over again. We have done this a couple of times and it has worked. The buyer and seller can also appeal a low appraisal if there is enough evidence that the appraiser fucked up and used a low comp that is not in the target homes neighborhood. This RARELY works but it is always an option.

Can a low appraisal kill the deal?

Yes – a low appraisal can kill a real estate transaction! Very few buyers want to pay more than the appraised value of the home and very few sellers in Seattle want to reduce their prices. The seller is typically better off putting the home back on the market than lowering the price to appease a Seattle home buyer.

Also – appraisers REALLY do not know the nuances of the Seattle neighborhoods. For instance if you are on the east side of 35th in West Seattle your home will be valued lower than if you are on the west side. Technically an appraiser can use a comparable home a couple of blocks away from your home and that home would be valued by 10-15% less than the neighborhood you live in.

Can the appraisal be challenged or appealed?

Sometimes an appraisal can be challenged or appealed. In my 25 years of experience I have only ever seen one appraiser change the value of the home when presented with compelling evidence that they used a comparable property that was not appropriate. But it is EXTREMELY rare!

How often do appraisals come in low in this market?

It is really rare for an appraisal to come in low in the Seattle market because the overall value of real estate in Seattle is very stable. However, you are more than likely to experience the appraiser asking for repairs to a home to bring that home but to code. Last Fall this happened to two of our buyers. One appraiser asked us to completely tear out and reinstall railing for a porch.

What role does the appraisal contingency play?

The appraisal contingency allows the buyer to get out of the transaction if the seller does not agree to lower the price in case of a low appraisal.

What Are My Options If My Home Appraised For Less Than The Contracted Price In Seattle?

What are my options as a seller if the appraisal comes in low?

First off, the seller does not have to do anything if the appraisal comes in low. They can hold firm to their contracted price that they agreed to in the contract. In addition, the seller is under no obligation to do anything if the buyer WAIVED their right to an appraisal because the price of the was determined by a bidding war.

Below are the options the seller can choose to do if the appraisal comes in low:

1st Option – Reduce The Price Of The Home To The Appraiser’s Price

The seller can agree to reduce the purchase price of the home to the appraiser’s new value.

2nd Option – The Buyer Closes The Gap Between The Appraised Value and The Purchase Price

The buyer can bring additional cash to closing to close the gap between the appraiser’s valuation and the purchase price. The lender can only lend on the value of the home that the appraiser has determined.

3rd Option – Both the Buyer And The Seller Give A Little On Both Sides

The buyer comes up with additional cash to close the gap and the seller reduces the purchase price.

4th Option – The Buyer And The Seller Negotiate The Terms To Appease The Appraiser’s Value Of The Home

Right now a lot of sellers are having to give some concessions to the buyers in the form of closing costs, paying the buying agent’s commissions, and/or repairs to the home. The seller and the buyer can renegotiate these concessions to compensate for reducing the purchase price of the home.

5th Option – Seller Puts The Home Back On The Market

Sometimes it is better to bless and release a bad buyer and their bad lender/appraiser.

Can I see a copy of the appraisal report?

The seller cannot see a copy of the appraisal report ordered by the buyer’s lender. That information is specifically for the buyer and the buyer’s lender. The only time the seller can see the appraisal report is when the buyer is using the low appraisal to lower the purchase price.

Does a low appraisal affect future buyers if this deal falls through?

No, a low appraisal does not affect the valuation for future buyers. For instance, we have actually saved deals by having the buyer change lenders and starting the process over again. An appraiser is not a machine. They have opinions that determine the value of a home up and down based on their own criteria, biases, and knowledge of that local market.

Home Appraisal Process For Sellers: Appraiser Independence And Their Accuracy

Can my agent communicate with the appraiser?

Yes your agent can communicate with the appraiser. Typically, appraisers do not like it when they are being bombarded with information by the listing agent. But there is a way to work through these nuances if you have the Diva touch.

How are appraisers selected, and are they local?

The lender orders an appraisal from a clearing house and an appraiser is assigned. The appraiser has to be completely separate from the the lender in order to determine real value of the property. Unfortunately, many appraisers are coming to the Seattle market from as far as Puyallup and have ZERO idea about an urban market. The appraiser who did the appraisal for our lake house in Long Beach, WA came from Walla Walla. That is clear across the state!!!!

What happens if the appraiser makes a mistake?

Unfortunately, the seller and buyer have very little recourse if an appraiser makes a mistake. The seller and the buyer can appeal the appraisal. They would need to provide detailed information about how the appraiser made a mistake. A typical mistake would be missing the purchase price, square footage, or the number of bathrooms and bedrooms.

Hope We Answered All Of Your Home Appraisal Process Questions For Seattle Home Sellers

I have been in real estate for over 25 years in Seattle and have a deep understanding of how the appraisal process works for sellers. My primary goal is to make sure my Seattle home sellers’ home is prepared for the market to avoid any issues with the appraisal process.

Hopefully I was able to answer your many home appraisal process questions that are applicable to a Seattle home seller. As many of you know, I have a very unique perspective in the Seattle real estate market. I have been a top producing listing agent for mid-century modern homes and unique luxury properties for over 25 years here in Seattle. In addition, I have been recognized nationally for my marketing innovation and activism. Over the years not only have I seen many different appraisals on homes I have also experienced many of the same situations as my clients. I’m here to help!

Are you looking for a Diva’s perspective to help you sell your unique Seattle home? Call me directly at 206-850-3102 or send me an email at kim@teamdivarealestate.com to chat!