A Current Home Appraisal May Surprise You



In the vocabulary of real estate, there are three terms that indicate a home’s valuation: the Appraised Value, the Assessed Value, and the Market Value. Rarely are these three values the same. So it’s easy to confuse them when considering selling a home, obtaining a mortgage, or contemplating ongoing costs of ownership (such as taxes and insurance). Because of these differences, you can appeal a home appraisal, tax assessment, and request a different market analysis.

It helps understanding a few things about appraisals, why they are ordered, and how they are conducted. Most people only associate a home appraisal as a step in the purchase process. The appraisal is a third party opinion (neither influenced by the seller or the buyer) to ascertain the value of the property. Lenders require these prior to a loan to assure the property value falls within the guidelines of the loan contract.

However, there are other uses for an appraisal, especially following significant changes in home values over the past couple of years, for determining the new value change after a remodel, total estate valuations, and other life events creating reasons for you to order a new appraisal even if you are not selling your home.

Appraisals Need to be Current

The valuation is calculated based on the home’s size, location, features, and its condition. While there is not an exact expiration date on appraisals, many lenders will not rely on an appraisal report that is more than 60-90 days old. After that, there are most likely sufficient changes in the market that require an adjustment in the report. In a stable or appreciating market, some lenders will allow an extension to the appraisal time lineup up to about six months when additional documentation is provided.

The point to be taken away here is that an appraisal that is several years old is not of much value to you or anyone else. An old appraisal can’t be used to estimate the value of your estate, apply for a second loan, or other financial needs that come along even if you have no plans to sell your home.

You Can Influence the Appraised Value

Many homeowners mistakenly believe they have no ability to influence a home appraisal because it is an independent third party valuation. While it is true that it needs to remain independent, as the homeowner, no one should know more about your house than you. Whether you are the seller, buyer, or have another need for an appraisal, there are ways you can better improve your chances of obtaining an accurate appraisal, including:

  • Begin before you or someone else orders the appraisal by asking if the appraiser has a thorough working knowledge of the local market. If your appraisal is in a rural market, having an appraiser come out from a city 60 miles away can result in inappropriate influences affecting the results. Or important rural influences being ignored or down played. Stay local. Unfortunately, regulation changes make it impossible to request a specific appraiser (it’s mostly the luck of the draw). Your options become either finding a different lender that uses local companies or following these suggestions to improve your results (before the appraisal is conducted).
  • Recent upgrades, remodels, replacements, and repairs may be overlooked. A new furnace, roof, or remodel may be missed by the appraiser. Seldom is your cost of a new roof or kitchen remodel fully reflected in the appraisal (after all, all homes are expected to come with a roof and kitchen). However, an appraiser may assume the furnace or water heater is original equipment if you don’t point out that it was replaced six months ago. In addition, assumable and transferrable warrantees can add value.
  • Before the appraiser shows up, tidy up the house. Whether you are selling or not (even if the property has a tenant in place) prepare the house as if it is being shown to potential buyers. De-clutter it and pay particular attention to bad odors. Few people realize that bad odors (pets, last night’s cabbage, etc.) instantly make people want back out the door.
  • Always be present when the appraiser arrives. Offer to give an overview of the entire home – highlighting the positives. This is a good time to point out major features, upgrades, and repairs.
  • Before the appraisal, measure your own rooms and give a written list to the appraiser. Almost certainly, the appraiser will make their own measurements but your list helps make sure he or she doesn’t miss a room. This list is a good place to include upgrades and repairs.
  • Don’t follow the appraiser around like a puppy but definitely ask if they need anything and let them know what part of the house you’ll be if they have any questions.
  • Be fully aware of the properties being used as comps in your neighborhood. If someone died in a bathtub in July and left the smell lingering, make sure the appraiser understands that is the reason the house sold for $50,000 less than yours is worth.

Inform the appraiser what you want them to compare your home to by sharing a list of improvements, providing the most favorable comps, and creating a cheat sheet detailing every little thing.

Please leave a comment if this article was helpful or if you have a question.

Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 10 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.

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