What to Know About Appraisals When Buying or Selling a Home

When it comes to buying or selling a home, few steps are as critical — or as misunderstood — as the appraisal process. Whether you're a first-time buyer, a seasoned seller, or a real estate investor, understanding home appraisals is essential to ensuring a smooth transaction and getting the best deal.

In this blog, we’ll break down the basics of appraisals, explore current market trends in 2025, and offer expert tips to help you navigate this key stage in the real estate process.

What Is a Home Appraisal?

A home appraisal is a professional, unbiased estimate of a property's market value. It's typically ordered by a lender during the mortgage process to ensure the loan amount doesn’t exceed the home’s worth.

The appraiser evaluates a home’s condition, location, upgrades, and comparable sales (aka “comps”) in the area to determine its fair market value.

Why Appraisals Matter for Buyers and Sellers

🏠For Buyers:

- Loan Approval: Most lenders require an appraisal to approve your mortgage.

- Price Negotiation: If the home appraises for less than the offer price, you can renegotiate or walk away.

- Investment Confidence: An appraisal ensures you're not overpaying for your investment.

🏠For Sellers:

- Pricing Accuracy: An appraisal can validate your asking price or help you adjust it before listing.

- Deal Flow: A low appraisal can delay or derail a sale, especially if the buyer is financing.

2025 Appraisal Trends to Watch

1. AI and Digital Appraisals on the Rise
   The appraisal industry is seeing a shift toward automated valuation models (AVMs) and hybrid appraisals that blend in-person inspections with digital tools. These methods speed up the process and reduce costs, especially for refinancing.
2. Appraisal Gaps Still Common
   In hot markets, bidding wars are leading to higher offer prices — sometimes well above appraised values. Appraisal gaps are prompting buyers to come up with additional cash or use appraisal gap clauses in their contracts.
3. Increased Scrutiny on Property Conditions
   Post-pandemic buyers and lenders are placing greater value on move-in-ready homes. Appraisers are factoring in property condition more heavily, especially for FHA and VA loans.
4. Local Market Knowledge Is More Important Than Ever
   Appraisers with deep familiarity with micro-markets are in high demand, as national data can’t always capture neighborhood-level nuances that affect value.

Expert Tips for Buyers and Sellers

For Buyers:

- Include an Appraisal Contingency: This protects your deposit if the home doesn’t appraise.

- Be Prepared for a Gap: Especially in competitive markets, budget for a potential appraisal shortfall.

- Ask Questions: If the appraisal seems off, request a Reconsideration of Value (ROV) and submit comps or evidence.

For Sellers:

- Stage and Repair: A clean, well-maintained home can positively influence an appraiser’s impression.

- Know Your Comps: Research recent sales in your area to set a realistic price.

- Attend the Appraisal (or Have Your Agent Do So): You or your agent can provide a list of upgrades and improvements to ensure they’re considered.

Final Thoughts

Home appraisals can make or break a real estate deal, but with the right preparation, they don’t have to be stressful. By understanding how appraisals work and staying up to date on current trends, both buyers and sellers can protect their interests and move toward a successful closing.

Need help navigating your next home appraisal? Our experienced real estate team is here to guide you every step of the way. Visit us at the Furlan Group or give us a call at 941-894-9888 for expert advice and personalized support.